Last week Barnaby Joyce and I again found ourselves disagreeing on the question of foreign direct investment. It's hardly a new debate; it has been going on since Settlement.
More specifically, Barnaby and I were arguing about how to attract foreign investment in agriculture.
I have no doubt that Barnaby is on the popular side of the debate, I suspect “popularity” is why he's there. Barnaby Joyce has stated that "if foreign investment wasn't such a big issue, he wouldn't be putting his endeavours toward it". It is this admission by Barnaby that shows his lack of understanding of the importance of foreign investment in agriculture.
While I don't submit that popularity in policies is not important; only political longevity provides one with a chance to make a real difference. It is why Labor committed to establishing the Foreign Investment Register to ensure confidence in the public domain about the reality of foreign investment in Australian agriculture i.e. where it is going and who owns what.
Leadership is important too and if Barnaby studied his Australian political history, he would learn that strong and smart leadership while hard, often delivers popularity in the medium to long term. Bob Hawke and Paul Keating introduced a number of structural reforms including the Capital Gains Tax and asset/income tests for pension eligibility. John Howard introduced the GST. All these leaders put their political careers and the fate of their governments on the line in pursuing these reforms but no one would now say either they were wrong or that the initiatives should be reversed.
These politicians drove their reforms because they genuinely believed they were necessary, and they were right. They identified a problem, put forward a solution, argued their case and prevailed in a way which was beneficial to their careers and to Australia.
What frustrates me is that in Barnaby's case, he hasn't yet identified a problem. You see like me, Barnaby supports foreign investment in our agriculture and agribusiness sectors. He often says so. He appears to understand that to fully develop Australian agriculture and to fully capitalise on the Asia-led Dining Boom, we will need huge amounts of capital investment - in roads, ports, rail, water infrastructure, sustainable farming methods and so on. Barnaby also appears to understand that as an island continent with a small population we have limited savings and as has always been the case, we rely on foreign savings and investment. We certainly could never have built the Snowy River scheme without it, nor without foreign labor for that matter!
Yet Barnaby and Tony Abbott have tried to put forward a solution to a problem which by their own admission, doesn't exist. Their lower thresholds for the mandatory screening of foreign investment proposals make no sense and will do nothing other than make an under-resourced Foreign Investment Review Board too busy to perform its key function effectively and efficiently. So what is the Board’s function? It's to ensure that any foreign investment is not contrary to the national interest.
But the Board doesn't actually hold the power to block a proposal. It only makes recommendations to the Treasurer who makes the final decision if any doubt hangs over the national interest. Indeed the screening thresholds don't matter to the Treasurer, he or she can look at and block any proposal he or she likes. So too can the National Security Committee of the Cabinet. Be assured, no controversial investment proposal escapes the interest of the Government, regardless of its value.
One more point, so much for the war on red tape! Prior to the election the Coalition stated its commitment to building a stronger and more productive economy by reducing the alleged “regulatory burden” that they claimed was strangling Australia’s economic prosperity and development. Well lowering this threshold is surely adding to the red tape burden for foreign investors.
Make no mistake; sending investment proposals in agricultural land above $15 million is a stunt and one which sends all the wrong messages to foreign investors who by Barnaby Joyce's own admission, we so desperately need
This article was first published in the FARMONLINE on Monday, 20 April 2015.