SUBJECT/S: Foreign investment; family farms; Backpacker Tax; Murray Goulburn; S.Kidman sale.


HOST: Joel Fitzgibbon, welcome to Breakfast.


HOST: This figure, this $1,000 billion to meet Australian agricultural goals- where do you get that figure from?

FITZGIBBON:  He makes it up Fran, he makes everything up.

HOST: No, you gave us that figure.

FITZGIBBON:  Sorry, I thought you were talking about Barnaby Joyce’s dams plan. What were you trying to say?  The investment required?

HOST: The $1,000 billion, obviously family farms can’t provide that and that was the point you were making.  What is that figure about?

FITZGIBBON:  It comes from a very good report called Greener Pastures done in partnership between the ANZ Bank and one of the big consulting companies in this country.  It makes the point that if we really want to meet our aspirations and take up all of the opportunities posed by growing demand for high quality food in Asia then we will need massive levels of investment and it underscores what a big task we have.  And it is obvious that as a nation of 23 million people, and therefore a limited savings pool, much of that by necessity will be foreign investment.

HOST: OK, and foreign investment was what Barnaby Joyce was on about yesterday, and he made this big pitch in his speech this week that we can’t sell off the farm, because if we do it will decrease Australia’s sovereignty and Australia’s patriotism.  What’s your response to that?

FITZGIBBON: Well Fran he completely departed from Coalition policy.  We have tried to establish a level of bipartisanship on foreign investment because it’s desperately needed, and what we need as politicians everywhere, is to continue to build public confidence in capital inflows to make people understand if we don’t secure that investment, and we have relied on that investment for all of our lives, as of course, as a country.  We wouldn’t have built the Sydney Harbour Bridge or the Opera House without foreign investment.

HOST: Sure, foreign investment is different to foreign ownership though, and foreign ownership of our agricultural land is a very touchy topic.

FITZGIBBON: Both the major parties share a common ground on this, though I do get frustrated when people like Barnaby Joyce leave the reservation or indeed they start to fiddle with screening thresholds just to send a message to the community that they are getting “tougher” on foreign investment when they know that we need to build foreign investment.  The Greener Pastures study I referred to underscores the point.

HOST: Are you though opposed to foreign ownership?  Would you have any concerns about more foreign ownership – about agricultural land, large holdings?  And it was put in the context again by Barnaby Joyce yesterday that it might be the end of the family farm?

FITZGIBBON: Well it won’t see the end of the family farm.  That makes no sense.  And of course as usual Barnaby Joyce is trying to spin it around – he is very good at that.  But the fact is when you need very large sums of capital investment, we have heard a lot this week about Gina Rinehart and Twiggy Forrest and the like, they are coming in as big corporate farmers, and they are bringing money, the money we need to improve water efficiency to lift the output of farms, to fund the research and development we need to improve our premium products.  All this sort of thing we need that the family farm does not always have the capital to do.  The family farm will always be with us, it will always play a critical role.  But if we are going to grow Australian agriculture we will need big corporate money.

HOST: OK, can we talk about the Backpacker Tax?  Because the fruit-growers, the farmers, this was a big issue at the NFF Conference.  Really frustrated at the lingering uncertainty over the Backpacker Tax.  As we know the Government has now come down with a decision to shift the Backpacker Tax from 32 cents back  to 19 cents.  And Barnaby Joyce says you are the ones holding this up.  Labor  has sent this off to a Senate inquiry – why did you do that?

FITZGIBBON: It’s more Barnaby Joyce spin, his integrity is gone out the window this week on a range of fronts.  But we are not holding the passage of the Bill up at all. This Government owns this tax, it’s Barnaby Joyce’s tax.  He was quite happy to grab the $M540 he was going to raise from the tax but was forced to back down.  He has only partially backed down.  Now this has been going on for 17 months Fran since the May 2015 Budget.  And growers are contacting me in large numbers and screaming because they say 19 per cent is too high.  But what the Government has also done is they have put the Backpacker Tax into the same Bill as a hefty increase in the Passenger Movement Charge and ridiculous changes to superannuation arrangements.  Because you see, growers and farmers generally are paying 9 per cent into a superannuation account only to have 95 per cent of that immediately taken back by the Tax Office.  So it is a tax on employers, it’s a big churn and they expect us to simply wave this through the Parliament.

HOST: OK, so can I take you back to the Backpacker Tax.  What is Labor’s policy?  You are saying 19 per cent is too high?  Because he was making the point repeatedly that in your budget figurings you were using during the election that you still had costed in there a Backpacker Tax of 32 cents in the dollar.

FITZGIBBON:  Well more Barnaby Joyce spin.  What they were doing throughout the election campaign was  spending the $500 million while at the same time sending a signal to the sector that it was going to review and therefore abolish the tax after the election.  So they were trying to con Labor into saying something that would cause our budget bottom line to be at a disadvantage.  But we are post the election now, Labor  only has one objective and determination and that is to make sure our farmers are accommodated to make sure they can secure the backpackers they need.

HOST:  Will Labor support a Backpacker Tax of 19 cents in the dollar? 

FITZGIBBON:  Well the Treasury modelling; Treasury told us that at 19 per cent the fall off in backpackers will be as great as they would have been under 32.5 per cent so we have a problem.

HOST:  So you might support 19 cents?

FITZGIBBON:  Well I am going to fight for a better deal for farmers. And you know if the NFF came to the same conclusion and stopped being the flagbearer for 19 per cent, we might get more progress towards a better deal for farmers.

HOST: The processing company, Murray Goulburn, its AGM today, dairy farmers will be there, six months or more after Murray Goulburn’s decision condemned many farmers to heavy losses.  You have been campaigning for Murray Goulburn to give more money back to farmers.   Is there any indication at all that they might make a decision closer to that today?

FITZGIBBON:  Well we are chipping away Fran.  They made a good announcement yesterday that will send more money back to farmers by way of a higher farm-gate price.  But it is a bit too little too late.  What they have done of course is announced that yesterday, just ahead of the AGM today to take some of the pressure off themselves.  So it’s a good announcement but again a little bit too little too late.  What has been extraordinary throughout this process is the unwillingness of either Barnaby Joyce or Malcolm Turnbull to be critical of Murray Goulburn.  I think if they had joined me early in the piece and had put pressure on Murray Goulburn to return more of their retained earnings back to the farm-gate, back to the farmers, I think Murray Goulburn would have done this a long time ago. But for some inexplicable reason they have been deafening in their silence. 

HOST: And can I just ask you finally, an issue that has been very much in the news, and that is the future of the S Kidman cattle empire.  In your opinion should the Foreign Investment Review Board tick off on Gina Rinehart’s revised bid, she has matched, and just beaten slightly, the bid by the four Australian family farm consortiums, it is up to $M86.5 now – is this a good bid?  There is a 33 per cent stake in this by China’s Shanghai Cred, though Gina Rinehart says she is prepared to go it alone if necessary.  What do you think – should FIRB tick this off?

FITZGIBBON:  Well the first thing I would like to say is this is a case in point where foreign investment is doing good things both  proposals seem to be planning to put big money into the properties to lift their output.

HOST:  Only one has got foreign investment.

FITZGIBBON:  Yes, but the point is, money is coming in and it is driving up the price for Australians looking to sell farm land – they are making big profits.  We don’t know all the details of the latest bid.  What I want to ensure is that whoever wins this contest is someone who is bringing capital to Australia, investing in those properties, growing those properties, lifting the productivity of those properties, the output of those properties and whoever does that will be doing a very very good thing for Australia.

HOST:  Joel Fitzgibbon, thank you very much for joining us.

FITZGIBBON: A great pleasure Fran.


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