DON’T be fooled by Labor’s cute criticism of the Federal Coalition for blocking the sale of GrainCorp to Archer Daniels Midland (ADM).
Shadow Treasurer Chris Bowen came out swinging yesterday in accusing his counterpart Joe Hockey of putting the National party’s interests ahead of the national interest in rejecting ADM’s $3.4 billion bid for Australia’s largest publicly listed agribusiness.
“This is a decision all about politics, nothing about economics,” he said on Friday.
“This is a decision in the Nationals' interest, not the national interest.
“This decision by the Treasurer means that Australia will miss out on investment it should have received, jobs won't be created that should have been created and the Australian economy will be worse off because of Joe Hockey's decision.
“Apparently, Joe Hockey can be bullied after all.”
But amid all of the controversy and furore over the GrainCorp foreign acquisition, it shouldn’t be forgotten that Mr Bowen had plenty of opportunity to approve the ADM bid several months ago, when it was his decision to make.
The US multinational lodged its original proposal to buy GrainCorp with the Foreign Investment Review Board (FIRB) in May.
Since then, the application was re-submitted to reflect a revolving political door which has seen three Federal Treasurers, three Prime Ministers and the government and opposition changing sides in the past seven months.
When the former Labor government went into caretaker mode ahead of the September 14 poll with a decision still pending, ADM knew it was a game changer and they faced plenty of political chaos.
With that kind of changing political landscape and personnel, you could hardly blame ADM for struggling to read the Australian political landscape accurately.
In fact, the company bent over backwards in trying to respond appropriately and appease all reasonable suggestions on how to advance the sale with reasonable conditions, as demonstrated by this week’s statement offering an additional $200 million in capital investment and other conditions.
After Kevin Rudd rolled Julia Gillard on June 26, Wayne Swan resigned as Treasurer having not reached a decision on ADM and Mr Bowen stepped into the job for 83 days.
On June 27, Mr Bowen’s capacity to make a decision benefitted from the Australian Competition and Consumer Commission’s announcement that it wasn’t opposed to ADM’s proposed acquisition of GrainCorp, saying it was unlikely to substantially lessen competition “as the merged entity would continue to face competition from a number of sources”.
As well as the ACCC’s recommendation, it has been strongly suggested that the FIRB made a recommendation to the former Treasurer before the election approving the GrainCorp sale.
But instead of making a decision on ADM and putting the national interest first way back then, Labor decided to ignore FIRB’s advice and instead handball a gigantic hospital pass in Mr Hockey’s direction by deferring the decision, until after the election.
That delay and buck passing was made easier knowing the polls indicated a whopping election defeat was on the way for Labor and they could use the ADM decision as political ammunition to try and wedge the Coalition post-election to score early political points.
So in this context, let’s take another look at some more of Mr Bowen’s more ‘flattering’ comments yesterday directed towards Mr Hockey.
“This is a decision taken by a weak Treasurer because it was too hard politically,” he said.
“Today Joe Hockey said Australia is not open for business.
“Now I recognise that foreign investment decisions are controversial and difficult but a good Treasurer makes the tough decisions.
“A good Treasurer explains the need for foreign investment to create jobs in Australia.
“A good Treasurer holds the line in favour of important foreign investment in Australia.
“A good Treasurer does not come out and say ‘It is in the national interest to block this foreign investment because it is not popular, because the polls tell me that I should block this foreign investment’.
“This is the big test of Joe Hockey's credibility and he failed miserably.”
Yes Mr Bowen, maybe a good Treasurer would indeed do all of these things, but it seems not the one who had the job before Joe Hockey.
The only saving grace for Mr Bowen would be that perhaps there wasn’t enough time to make a full and proper assessment of the entire GrainCorp-ADM issue.
Perhaps if he had the time to give the issue the attention it deserved instead of dealing with internal ALP machinations ahead of the lection, he may have reached a similar conclusion to Mr Hockey.
As Mr Hockey said, the proposed acquisition of GrainCorp by ADM was one of the most complex cases to come before FIRB and one of the most significant proposed acquisitions of an agricultural business in Australia's history.
“In their response to my request for advice on the wider ramifications of this case, the members of the FIRB could not agree on a consensus recommendation in relation to the proposal,” he said.
“They were split.
“For me to reject this proposal, I had to determine that the acquisition of GrainCorp by ADM is contrary to the national interest and, based on all the information available, I have now made that decision.”