ABC News Radio

Subjects: Foreign investment in agriculture.

Transcript, E&OE

7 June 2012

TICKY FULLERTON: We've been tracking the tender for Ord Two this week, a big chunk of arable land in the Top End. One of the final bidders is a Chinese company, raising concerns within the Coalition and from another bidder, AA Co. Trade Minister Craig Emerson has been dragged into this, having spearheaded a joint Chinese-Australian study on investment in the nation's farmland. And the Minister is outraged by Barnaby Joyce's suggestion of any nexus between him, the Chinese bidder, Zhongfu, and its lobbyist, Bob Hawke. Minister, welcome to the program.

CRAIG EMERSON: Thanks, Ticky.

FULLERTON: Now, growing concerns of course about food and the national interest. Going to the Ord sale in particular — Ord Two — why would Australia adopt — opt — for a Chinese freehold ownership and control over what, on the face of it, looks like quite a strong alternative Australian bid backed by Australian super funds?

EMERSON: Well if I could put it in context: there's been speculation — quite mischievous speculation — about a joint study that's been initiated by the two governments that does involve private sector input. We've got a big report out today by the Business Council of Australia talking about $900-odd billion in an investment pipeline. You've got two choices here: and that is, one, a government that welcomes foreign investment, subject of course to Foreign Investment Review Board screening where it is of state-owned enterprises or projects involving more than $244 million; or the Coalition, which has adopted a position that is hostile to foreign investment, in particular foreign investment from China.

FULLERTON: The issue is, though, about sovereign wealth funds is that when they are combined with China and with food security, because the concern is that the process — you've talked about the Foreign Investment Review Board — that it isn't a robust process and there is a potential for Australia's national interest to be impacted there.

EMERSON: Well, OK, if the Coalition position and the ABC's position is that it does not want…

FULLERTON: The ABC doesn't have a position on this; we're just asking the questions.

EMERSON: … it does not want, it does not want investment from sovereign wealth funds, come out and say it. That's really what the Coalition has said.

FULLERTON: Well the inquiry that is being led by Senator Heffernan has found, and I've been reading the Hansard, they've talked to FIRB, they've talked to DFAT and the ATO and they have found that the national interest appears to be a political decision and that the FIRB process does have holes in it.

EMERSON: Well, let's see how the report of that Senate inquiry unfolds. At least Senator Heffernan is going about this in a rigorous way. We already have a national interest test. We've articulated exactly what the criteria are for assessing the national interest. But if we really do believe that Australia's agricultural development can be funded from now on without any investment from sovereign wealth funds or state-owned enterprises, well I think that's a fool's belief.

FULLERTON: The tax issue for sovereign wealth funds: again, the committee has asked the Tax Office, and the Tax Office has basically agreed that in a situation where a sovereign wealth fund owned land and grew food and exported it back to China, that it may not pay any tax at all.

EMERSON: Yeah, I've seen Senator Heffernan's references to that, which he's kindly provided to you, and that's fine; that's fair enough.

FULLERTON: But doesn't that concern you?

EMERSON: Well it doesn't, actually, because there is no proposal; there is no proposal, despite what Senator Joyce and Senator Heffernan are saying, for foreign investors to come in here, buy up the Australian farm, dedicate the production to their home markets and not sell it on the market. The project that I've undertaken with the Chinese authorities specifically recognises that the production of Australian agricultural produce would be sold on the world market at world market prices.

FULLERTON: And you will ensure that that happens?

EMERSON: Well, that's the whole idea and that's the… you've asked about the study; that is the basis on which we've set up the study. That is, what is wrong with expanding Australian agricultural production? I mean, I've just spoken to David Farley; we've had a good, if not robust, conversation, and he points out that his own company was funded, was built, on foreign investment. We are… this is very Hansonist. We are in a situation…

FULLERTON: But I don't think any of these people are against foreign investment.

EMERSON: Oh, yes they are.

FULLERTON: I mean, Senator Heffernan on this program acknowledged that foreign investment built up, helped build Australian agriculture. But when he does talk about the issue of sovereign wealth funds, it's this combination of outright ownership and then being able to control the passage of food.

EMERSON: There's no such proposal. This is hysterical scare-mongering on the part of Senator Joyce and to a lesser extent Senator Heffernan.

FULLERTON: The reason I say this is because we've recently had a Lowy Institute poll. Fifty-six per cent of their respondents do not… believe that there's too much Chinese investment in Australia.

EMERSON: Alright, well we should ban it and that'll keep everyone happy.

FULLERTON: Eighty-one per cent are actually against foreign ownership of farmland. So, you've got a public which is very sceptical and a public that doesn't necessarily want to be a boiled frog on this issue. And I think that's why the Ord in particular has become a bit of a tinderbox.

EMERSON: Yeah, and a malicious slur and smear of me and Bob Hawke. That's what happened. That's what happened under parliamentary privilege, condoned by Tony Abbott, effected by Senator Barnaby Joyce.

FULLERTON: And you say the first time you knew about…

EMERSON: That's correct.

FULLERTON: … Zhongfu and Bob Hawke's involvement was reading it in The Australian.

EMERSON: Correct. I had never known of it. I have never had a conversation. But under parliamentary privilege, Senator Barnaby Joyce, alternative deputy prime minister of Australia, strongly inferred that I was taking secret payments from Bob Hawke. I can handle that, but that is a disgraceful slur against a great Australian patriot in Bob Hawke.

FULLERTON: But I guess what it I'm asking you about is a perception problem, potentially, that you're promoting Chinese investment all round Australia. We have a prime candidate, Zhongfu, backed by Bob Hawke — who you had a close relationship obviously within the past — and a national interest test which doesn't stand up to scrutiny. Can you see why, perception-wise, that might be an issue?

EMERSON: I can see why the ABC is promoting what is a completely false and malicious smear — that's what it is: a smear. And there is not one shred of evidence that I have ever had a conversation with Bob Hawke about this. There is not one shred of evidence that I have ever received any payments.

FULLERTON: That's not the suggestion. The suggestion is that decisions about Chinese investment might be more political than rigorous.

EMERSON: The decisions are not made by me. They're not made by me. They're not made by me. They're not made by me.

FULLERTON: No, it will be made by the Treasurer, Wayne Swan.

EMERSON: Well, I would have thought the Western Australian Government might be involved in this.

FULLERTON: Indeed, yes.

EMERSON: When this was conceived, I had no design about Ord River projects or anything like that.

FULLERTON: Can I ask you one last question…

EMERSON: Sure.

FULLERTON: … in particular about Zhongfu, who is a bidder in this tender: how much does the Government know about Zhongfu and its ownership?

EMERSON: This is amazing. That's the Barnaby Joyce view of the world. We don't let anyone bid for anything — and I actually have David Farley saying, 'Oh, the Chinese have been given a rail's run'. What are we really saying: that there should only be an Australian bidder? If we're saying at the outset that a Chinese company cannot express an interest in any economic development in this country unless the Commonwealth has done a thorough investigation into that, well, say goodbye to foreign investment; say goodbye to the $920 billion pipeline; say hello to Barnaby Joyce as alternative deputy prime minister of Australia; say hello to Tony Abbott. Put the walls up: fortress Australia; back to the old, you know, Federation settlement, back to the 1950s — that's what you get with Barnaby Joyce and Tony Abbott.

FULLERTON: Minister, you are just off a plane from Europe, so we thank you so much for coming straight in here.

EMERSON: Thanks, Ticky.

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