Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I will run through them in a minute if you like. We have outlined our position on agriculture. They have outlined two positions on agriculture.

You are not serious about foreign investment if you play around with the renewable energy target like those opposite are. You are not serious about the billions of dollars that should flow into our renewable energy sector if you have ministers saying one thing, including here, and other ministers saying another. You need to be sending a signal to those who want to invest in renewable energy that we are fair dinkum about renewable energy.

With regard to what we heard from the Minister for Trade and Investment today, as I said before, there were some things we agree with and some things that we disagree with. We think that the most important thing that you need to contemplate when you are talking about being 'open for business' is not just the rhetoric, as important as that can be in some of these international fora, but also the decisions made, and I do want to spend some time on the inconsistency of those opposite when it comes to foreign investment.

The Abbott government failed its first test on foreign investment when it blocked the proposed takeover of GrainCorp by Archer Daniels Midland. Not only did the government block the takeover but it has been completely inconsistent in its reasons for doing so, showing that it is making up investment policy on the run. It is noteworthy that the minister mentioned the First Fleet in his statement but not the Treasury decision on that foreign investment proposal.

In April this year, the Treasurer claimed that he had blocked ADM's proposed takeover of GrainCorp because the American company was of 'not particularly good character'. The Treasurer's extraordinary claim was made public five months after blocking the ADM investment and raises serious questions about the transparency and fairness of the government's approach to foreign investment. This sorry saga of confusion and contradiction on ADM's proposed $3.4 billion investment gives the lie to the government's claim that Australia is open for business. The Treasurer and the Minister for Trade and Investment have made a series of inconsistent statements about ADM's proposed acquisition of GrainCorp. When the Treasurer announced he was blocking the deal last November, he cited national interest grounds and the impact on competition and made no mention whatsoever of the character grounds that he has since talked about. Then, in March this year, the Minister for Trade and Investment told an investor conference the decision to block the takeover was just a signal that the deal's timing was wrong and that 'there may be an opportunity at some stage' for ADM to renew its bid for GrainCorp. A month later, the Treasurer made a new claim when he said that one of the reasons it was knocked back was concern about the company's character. Given this claim was made so long after the decision to knock it back, we do wonder whether ADM was given the opportunity to respond.

If the Abbott government wants to show some leadership and find some consistency on foreign investment, it could start by providing a coherent explanation for that particular shambles. As the BCA's chief executive, Jennifer Westacott, said at the time of the ADM decision, certainty about Australia's foreign investment policy and transparency in communicating the reasons for decisions are important for global confidence in Australia. Inconsistent and incoherent behaviour by the government on major investment proposals will erode Australia's reputation as an investment destination, which will be bad news for jobs and growth.

In addition to the Treasurer's retrograde decision against ADM, we also have the tail wagging the dog inside the coalition party room, with the imposition of new and arbitrary limits on investments in agricultural land. The minister talks big when he is on the phone to financial journalists, but he cannot stare down the Nats in his own joint party room.

In a speech to the Economic and Social Outlook Conference in Melbourne in July, Labor's shadow minister for trade and investment, Senator Penny Wong, outlined Labor's ambitious approach to lifting the thresholds on foreign investment. Australia has always built its economy with investment funded by a mixture of domestic and overseas capital. We agree, as I said before, with the minister that our economy is capital hungry and it does rely on foreign investment to create jobs and business opportunities and to boost growth. As part of a comprehensive agreement delivering real market access gains and dealing responsibly with the labour movement, Labor is inclined to support China enjoying the same investment thresholds as the United States. That means a threshold of just over a billion dollars for Foreign Investment Review Board screening of proposed investments in non-sensitive sectors. Lower thresholds should continue to apply for investments in sensitive sectors or by state owned enterprises where issues of national interest can arise. The proposed treatment of state owned enterprises must be outlined by the minister before any agreement is signed.

Labor does not agree with the Abbott government's policy of imposing more restrictive rules on foreign investment in agriculture. As Penny Wong has said:

If we are serious about significantly expanding our food exports to Asia, we must front up to the reality and necessity of foreign investment in our agricultural sector.

It is inconceivable that we will be able to scale up production to fully tap into the growing consumer markets of Asia without foreign investment.

Placing hurdles in the way of foreign investment in our primary production industries will only jeopardise their growth.

That is why Chinese investment in agriculture should be treated in the same way as investment in other non-sensitive sectors.

Looking further ahead, once Australia has a $1 billion-plus threshold for FIRB screening for investors from the United States, Korea, China and New Zealand, it is hard to see why we should discriminate against other major trading partners.

Minister Robb has also cited the increased threshold for these countries in his statement, but Labor believes that Australia should consider unilaterally extending the FIRB screening rules offered to these FTA partners to all countries. Just like domestic investments, foreign investment proposals would still need approval from competition and corporate regulators to maintain competitive markets and protect shareholder interests, and for proposals worth more than $1 billion, the government would retain its powers to scrutinise investments on national interest grounds. But for a country that thrives on investment, it makes no sense to impose unnecessary red tape or barriers to investors looking to build businesses and create jobs legitimately in Australia.

Labor has a proud record when it comes to foreign investment. We in Labor understand that foreign investment means growth and jobs when it comes to broader measures to open up our economy. Over the years, Labor trade ministers from John Dawkins and Peter Cook to Simon Crean and my own predecessor Craig Emerson have played important roles in dismantling protectionist barriers. Labor wants to see more opening up of our economy on a wider range of fronts, with deeper integration into our region and into the world, because this will deliver growth for Australia and will improve living standards for working people. If Australian policy makers handle this shift intelligently they will deliver great economic benefits for future Australian generations.

The Gillard government's Asian century white paper set the goal of ensuring that Australia's economy becomes more integrated with Asia, with goods and services, capital, ideas and people flowing more readily between Australia and the economies of our region. If this can be achieved there will be tremendous opportunities for Australian businesses and investors in countries like China and India. But it will not just happen by itself. It will require getting a raft of policies right, not just in trade but also in industry and innovation, education and science, investment and infrastructure. Unfortunately, in so many of these areas billions of dollars have been cut from investment right across the board. To be serious about boosting Australia's trade performance, it is necessary to be serious about boosting productivity and competitiveness. Declaring that Australia is open for business requires more than signage on a lectern. We need continuing economic reform.

Labor wants an innovative, competitive, dynamic and outward-looking Australian economy. We want to think more broadly about the kind of country that other companies around the world would want to invest in. The minister outlined some of those factors that companies around the world take into account. We think that that shopping list of policy measures was characteristically narrow and exclusive and an excuse to pursue some pet ideologies. To give a speech about investment and not to mention superannuation, to be the minister for investment and not talk up super in our economy, is bizarre in the extreme. Anyone who knows anything about this sort of stuff knows that that combination of foreign and domestic investment—that capital—comes not only from overseas but also from our own super funds and other sources. I think if we are going to have a minister for investment he should understand and should value and should treasure the role of superannuation in our economy, including the role of superannuation in helping Australia get through the global financial crisis.

The other thing we want to hear from the government is that a lot of companies around the world want to invest in a country where the people are smart and well trained and where there has been substantial, proper investment in the human capital of a nation. To be attracted to Australia, people want to know that they are investing in a country full of dynamic, adaptive and resilient people. That goes to some of the unfortunate, disappointing and devastating reforms to the higher education system proposed by the Minister for Education which will price some people out of the market. Those opposite do not have a great understanding of people who are vulnerable in our community. Some people will finish high school and they will think about higher education, but they will decide against it on the basis that they do not want to owe Chris Pyne $100,000, they do not want to take all their life to pay back that money and they do not want to choose between a higher education—a degree—and buying a house or starting a family. The massive majority of the Australian people are with Labor on that issue.

Mr Tudge interjecting—

No, they did not. When we talk about team Australia, its membership should be broad. What I mean is that when we are talking about foreign investment we need to make people understand that foreign investment is a big opportunity for Australia and that its benefits need to be more broadly felt. We need more people to be able to grasp the benefits of prosperity in our country. That means we need to do a better job—all sides of politics, anyone involved in the public conversation—of explaining to the Australian people the benefits of foreign investment and the benefits of opening up our economy so that those who adopt a reflexively defensive position do not dominate the debate. I think probably we could agree, and I am sure the minister would agree, that it needs constant effort on both sides of politics and all parts of the country to consistently sell the benefits of that effort if you do believe in foreign investment and in opening up the economy.

The minister mentioned before the global value chains that are dominating the trade structure of the global economy right now, particularly in our own region. When we talk about foreign investment and trade we want to make sure that we are training our people for the best parts of those global value chains. We want to be at the good end; we want to be at the high-wage, high-skill end of those global value chains. I think that is a worthy aspiration for a First World, first-rate country like ours. We cannot compete with other countries on wages. We cannot win a race to the bottom. So it is important that we are training our people up for the best parts of those global value chains.

In finishing up my response to the Minister for Trade and Investment, I will say that we do agree with the government on the tremendous opportunities available to Australia out of foreign investment and trade. We welcome the opportunity to engage on these issues, and we thank the minister for the opportunity to respond.

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