774 ABC MELBOURNE MORNINGS
30 JUNE 2011
SUBJECTS: Foreign investment; food security
Jon Faine:
Bill Shorten is the Assistant Treasurer in Julia Gillard's Government. She nominated him on air when she had a chat to us the other day as the person to whom she was seeking advice from over a review of foreign investment rules, particularly about the gradual and creeping purchase in particular by Chinese interests of coal mining land near Gunnedah in NSW and also farming assets in Western Victoria. Bill Shorten, good morning to you.
Bill Shorten:
G'day John, how are you?
Jon Faine:
And now Bob Brown at the National Press Club yesterday, has certainly put the cat amongst the pigeons on an issue that was already on your desk, so what is your initial view of the issue and do we have a problem?
Bill Shorten:
Well I think everyone is entitled to an opinion on this question. What I think is that there are at least two issues and maybe a couple more underneath the surface of this. One issue is the role of foreign direct investment: should we have it? Is it scrutinised enough? Are we vigilant enough in maintaining our national interest? Or are we being to xenophobic and discouraging foreign interest? That is one set of issues.
The other set of issues underlining it in this particular debate, that people may or may not have followed, is that a mining company has an exploration licence granted to it from the NSW Government, the NSW Government and therefore NSW taxpayers have received hundreds of millions of dollars to issue that licence. The companies then purchase farms, people have sold farms of their own free will and they have got a good price. The issue there is that it happens to be a Chinese company, that's the first issue there, what I would say is the other big issue underlying this is how much land used for agriculture in Australia should be available to be sold to mining companies to be used for mining.
Jon Faine:
And that was Bob Brown's point yesterday, food protection is worth more in the long run than digging it up and ruining it for coal.
Bill Shorten:
Well that's right, except if you want to sell your farm for the best possible price, do you take a Bob Brown, 'well in a thousand land years this land is worth more than it is in the next fifty years.' That doesn't mean he doesn't have a point about food security. There are two issues here. One is where do you cut the cake between mining and agriculture competing for certain parts of land. The other issue, which is related but also quite distinct, is the identity of the people purchasing the land.
Jon Faine:
Ok that comes down to my mind to a simple question. Could an Australian investor by farm land in China?
Bill Shorten:
Well Australian investors enjoy some rights in China. I don't believe the Chinese economy would provide all the same opportunities.
Jon Faine:
So why should our door be any more open then those of the country of origin of the investors? In other words if foreign investors from a country where we have similar rights want to invest here, that is fine, there are reciprocal opportunities but we shouldn't open the door any more widely than those countries do to us.
Bill Shorten:
I understand that logic but I think there would be unintended consequences of applying what we could call the 'Faine' doctrine.
Jon Faine:
Don't call it that.
Bill Shorten:
Ok, we won't call it the 'Faine' doctrine, just Thursday morning humour John.
Jon Faine:
Don't give up your day job Bill Shorten.
Bill Shorten:
No I'll stick to politics, nothing funny there. Seriously what you are saying is perhaps we should apply a different foreign invest test to countries with different property laws to Australia. My concern to that, at an elevated level, is that foreign investment is important to Australia.
Jon Faine:
Vital, we would be stuffed without it.
Bill Shorten:
Our economy would suffer without capital from abroad. If we started to just immediately demand everything be the same.
- That won't change property laws in some jurisdictions who invest in us.
- We will just kick an own goal in terms of a strike on our own investment opportunities
So I think we should have a strong national interest test, we have a strong national test, but what the Government has done, we could see this issue coming after the last election. So my self and the Minister for Agriculture Joe Ludwig have commissioned respected economic bodies, the Australian Bureau of Statistics...
Jon Faine:
Another principle to establish, are the rules different for foreign investors buying land for mining compared to foreign investors buying land for farming? Do you have the same or different tests?
Bill Shorten:
We have a different test if it is a foreign government to a foreign company. When we talk about foreign investment there are sovereign wealth funds and government entities and companies who buy and then there is foreign private sector. The reason why I mention that, foreign government entities or sovereign wealth funds or companies run by foreign governments, any bid they make on any investment in Australia, from zero dollars, has to be checked out.
Jon Faine:
That's a separate thing.
Bill Shorten:
So what we are talking about, foreign private owners, do they get a different test...
Jon Faine:
If they are buying a farm to if they are buying a mine
Bill Shorten:
No, no they don't
Jon Faine:
Should they?
Bill Shorten:
It depends if you think one is more important than the other. I think they are both important sections for the economy. One thing I have discovered since becoming Assistant Treasurer is there is no meaningful, coherent register of who owns what farmland in Australia. So when an issue came up six or seven months ago I found out that no one could actually tell me definitively who owned what in our farmland. I do respect that there are sensitivities around our farmland, I do respect that there is concern about water rights. There is a 3rd issue that a lot of farmers are doing it hard because some of the Agri-businesses and the process are consolidated into one or two or three operators and farmers often feel squeezed in price, so some people on farms are doing it hard.
Jon Faine:
It would be a very brave government that says you can't sell to the highest bidder if the highest bidder happens to be someone forcing prices up from overseas. You would be denying people an opportunity.
Bill Shorten:
It would be foolish in many cases to just say to people, you can't sell your farm for a good price. I think there are circumstances that would warrant saying no to deals. That is why the Australian government accepted the advice of the Foreign Investment Review Board over the Singapore Stock Exchange merging with the Australian Stock Exchange.
The way we go forward here John I think, I do think it is important we have facts. A lot of public debate at the moment is getting dumbed down to three word slogans, climate change is an example and I think Bob Brown said that. I also think that those on the left need to be as responsible as they demand those on the further part of the right. Lets get the facts right, who owns what, and then we can see if there is an ongoing challenge and what the trends are.
Jon Faine:
Two quick questions if I may. They are making a film about the Tasmanian miners, down the mine shaft. Who is going to play you?
Bill Shorten:
I think I should leave the production of the film and discussion to the people that are making the film and the people who are making money out of the film.
Jon Faine:
Is Russell Crowe going to play Bill Shorten?
Bill Shorten:
I just hope that Todd and Brant get represented fairly and the short answer is no.
Jon Faine:
I thought it was worth a go. You used to represent trade unionists in their struggles for a better share of the pie; we have talked about shares of the pie in the context of Greece and the AFL this morning. I have pretended, I've channelled Andrew Demetriou in my discussion with the Players Association and they couldn't really come up with a single or compelling strategy reason why they should be paid more. Do you think they get a fair share of the pie?
Bill Shorten:
I think they are well renumerated for what they do. I've got no problems about them seeking to improve their relative shares, I understand they are seeking to get a percentage, this is between the AFL and the players association, so what ultimately happens is up to them.
I have a couple of observations having represented jockeys and represented netballers and other athletes that the very top end of the profession always do very well and quite a lot in the audience say, well look at your top players they are getting lots and lots of money are these players just being greedy? The reality is to sustain elite sports there are literally hundreds of athletes who don't earn the big money, they will spend 10 years of their life from their early teens training.
Jon Faine:
But they still do well they still get paid well by community standards. They are not paupers and they are not conscripts.
Bill Shorten:
But you can be more than a pauper and still be allowed to collectively bargain in this country. My observation is purely this John, all the sports we enjoy are supported by athletes who spend a long time preparing, not a lot of them will play the 100 games, many of them will play a lot less than the 100 games. They spend 10 or 12 years... I'm just saying that in my experience there is always two sides to every story. I have no doubt it will resolve but I think that if the Players Association are collectively bargaining that is legitimate and I think you will find that over time they will work these issues out. What is unusual is that people think that collective bargaining happens in factories, it happens in lots of places.
Jon Faine:
Thank you for your time this morning, Bill Shorten Assistant Treasurer in the Federal Government.
