GILBERT: Minister, thanks for your time.
WONG: Good morning Kieran.
GILBERT: The Opposition Leaders going to unveil the Coalitions Discussion Paper on foreign investment this morning. Lets go through a couple of things that we do know: theyre planning to lower the threshold at which acquisition of farm land is scrutinised. Whats your view on that, to start with?
WONG: I think more broadly, Kieran, what you can see from whats in the papers today and from what Senator Barnaby Joyce has been spruiking in papers prior to this, is that the National Party, Barnaby Joyce and his cohort, are the people running Tony Abbotts economic policy. So, so much for Joe Hockey beating his chest last week and telling everybody he was pro-foreign investment. What were seeing is that the National Party is writing Coalition economic policy when it comes to foreign investment.
GILBERT: Lets look at the detail though, because at the moment if a foreign investor buys a farm or an agricultural asset worth $243 million or lower, it doesnt attract any scrutiny from our authorities. Is that in the national interest?
WONG: Foreign investment as a first principle is in the national interest. Thats why we as a nation have had, over many decades, substantial foreign investment. We should remember why we want foreign investment: so that we can invest in the productive capacity of Australia and the reality is Australia has always been a capital hungry economy. Weve always needed more investment than we ourselves could generate, and that investment generates jobs, it generates economic growth. So lets remember that; thats where we should start.
It is important to have investment rules which recognise the national interest and we have thresholds in place, we have a body which looks at the investment proposals very carefully. And, I think importantly, for state-owned enterprises, remember they are scrutinised very carefully regardless of the amount of investment. So there are already strong rules in place. The context of Tony Abbotts policy is what weve seen from Barnaby Joyce in recent weeks, and that is a very negative thing for the Australian economy.
GILBERT: But you can buy a fair bit of agricultural land, farm land, dairies ... $243 million I think $244 million is the threshold; anything lower than that and it doesnt attract any attention. Doesnt it make sense to lower that threshold? If foreign investors want to make a bid for land, sure thats fine, but why not scrutinise it if it is below that quite high threshold?
WONG: I think youd certainly be seeing a lot more regulatory hurdles, wouldnt you, to foreign investment coming into Australia. And whilst, of course, you want your national interest to be preserved in how you run your economy, including in relation to foreign investment, its a pretty big burden of red tape to be starting to say were going to scrutinise everything, even from private investors. And remember thats what, as I understand, theyre talking about. Were not talking about state-owned enterprises here.
And people are forgetting in this discussion, certainly Tony Abbotts forgetting, what the benefit of foreign investment to Australia has been and is. It generates jobs for Australians. It ensures investments that were not able to onshore ourselves.
GILBERT: But the point about food security that the Nationals make I know you refer to Barnaby Joyce and deriding his contribution in this debate, but a lot of people agree with him and it comes to the issue of foreign governments, or foreign investors I should say
WONG: Well this is the point though, Kieran, thats an important point ...
GILBERT: because you say foreign governments are scrutinised.
WONG: Yes, foreign governments are scrutinised.
GILBERT: But when youve got investors coming in who arent scrutinised, and with that threshold as high as it is, farm land can be picked up quite easily without any authorities looking at it.
WONG: Well, Id make a few points. First and I dont have the most recent figures in front of me but my recollection of them is that youre talking about a very small proportion of Australian agricultural land which is currently owned by foreign investors, thats the first point.
The second point was in terms of your question, and no criticism to you Kieran, but you again conflated foreign governments with foreign investors overseas investors, and its important to remember we have a different regime when it comes to state-owned enterprises.
But Id again say this: if an investor from overseas can ensure that a property generates more income, more employment and is able to generate more product, some of which one would think Australians might buy and Australians may benefit from the export profits off such a product, isnt that a good thing for Australia?
GILBERT: Lets look at something else that Tony Abbott is going to propose this morning. Hes going to suggest that the foreign investors, not the state-owned companies or sovereign wealth funds but foreign investors companies need to make it clear what foreign influence there is at all any government influence at all that there might be within that company. Thats a fair thing to do isnt it?
WONG: I would think that the Foreign Investment Review Board, given the provisions that are already in the Governments guidelines about foreign investment in relation to state-owned enterprises, would already be looking at these sorts of issues to ascertain whether or not a company was in fact a state-owned enterprise for the purposes of our legislation.
Were happy to have this discussion about foreign investment, were happy to have more transparency, the Treasurers spoken about that. But I do think what this is being driven by is a National Party economic agenda. Its contrary to what Andrew Robb and Joe Hockey have said and it just shows where Tony Abbotts head is when it comes to the economy.
GILBERT: Lets look at the Fair Work review now; its been slammed pretty much unanimously by business groups arguing that the review came up with the problems but without the solutions. Can I ask you, if the review has again found that productivity is a problem in this country, surely the workforce regime is a significant factor when youre talking about productivity. And if theres an issue then some changes need to be made.
WONG: I think there are two questions, arent there? And the first is what is the situation in terms of productivity growth in this country? And whilst the figures have been stronger over the last year, obviously over the last decade they havent been as strong as in the previous decade.
The second point is what drives productivity and I think the review made the same point that a number of other economists and also the Governments been making which is that you cant say that a single piece of legislation is the single factor that affects productivity in this country. And if people are serious about improving productivity there are a whole range of things we need to do including a collaborative approach to our workplaces and our enterprises, which often is not an issue of legislation but is an issue of attitude.
GILBERT: Okay, Senator Penny Wong, my apologies, were out of time this morning but I appreciate your thoughts and contributions this morning. Thanks for that.
WONG: Good to be with you.
ENDS