Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Disclaimer: The Parliamentary Library does not warrant or accept liability for the accuracy or usefulness of the transcripts. These are copied directly from the broadcaster's website.
Interview: David Uren, Economics Editor of The Australian -

View in ParlViewView other Segments

EMMA ALBERICI, PRESENTER: David Uren is economics editor of the Australian.

He's written a book called 'Takeover: Foreign Investment and the Australian Psyche'. In it he argues that Australia's history of protecting local industry from overseas competition helps explain the conflicted attitudes to foreign investment, despite the fact our economy has been built on capital from other nations.

David Uren joins me now in the studio. Welcome to the program.


EMMA ALBERICI: Now, the China FTA: are some of the concerns being expressed by the unions valid?

DAVID UREN: Well, it's hard to penetrate. You've got on the one hand it looks as though at a simple reading of it as though Chinese companies developing projects worth more than $150 million will be able to bring in their Chinese construction teams.

But I think that the Government would argue that suggestions that we're about to see towers of bamboo scaffolding in the CBDs is a little bit missing the actual substance of it and that the policy underwriting the agreement requires that there be labour market testing, that jobs be offered to Australians first.

So I think there are some... at the face of it there are some issues that need to be explained, but I think that a lot of the fear is being overhyped.

EMMA ALBERICI: Is Australia any more uncomfortable about foreign investment than other countries?

DAVID UREN: Yeah. The Paris-based OECD rates Australia as having one of the most restrictive foreign investment regimes in the advanced world. There are many emerging countries that make life even harder. But yeah, we're quite unusual.

EMMA ALBERICI: And how do you explain that? Is it xenophobia or is it something else?

DAVID UREN: Well, I think when you look at it, it runs quite deeply into Australia's history. I think on the one hand we've had protectionists, really from the very early days: 1850s or thereabouts. People looking to foster local industry and keep out foreign competition.

And then on the left you've had: variously, it was the people who were opposed to money power; these days you'd call it anti-globalisation. In the 1970s it was anti-US imperialism. But there has been this current underpinning the left, throughout Australia's history, that is about keeping the forces of capital out.

There is - cutting again through the history, cutting across both the protectionists and the left, there have often been tinges of xenophobia; of at times racism and, you know, hostility to the outsider.

EMMA ALBERICI: For all the talk of the Abbott Government being open for business, you talked just then about the restrictive nature of the policies here when it comes to foreign investment. I understand they've become even more so under this Government?

DAVID UREN: It was quite unusual at the... I mean, really the spark for writing a book on it was the campaign launch of the Coalition in the 2013 election, where it was all: "We're open for business. We will be abolishing carbon tax and mining tax."

But then you had Warren Truss saying, "And we'll also crack down on foreign investment and agriculture" and that the problem with the FIRB is it's never blocked anything in the agricultural industry "and we're going to change that." So...

EMMA ALBERICI: Conflicting messages?

DAVID UREN: Yeah, indeed.

EMMA ALBERICI: And there's clearly been some tension around this issue within the Federal Coalition itself, because as far back as I can remember, when the Coalition was in power we had a national trade minister, dating back to, I think: you know, you've got Doug Anthony and Tim Fisher and Mark Vale and so on?

DAVID UREN: John McEwen.

EMMA ALBERICI: Indeed. And now we've seen Tony Abbott appoint Andrew Robb, a Liberal. Was that strategic?

DAVID UREN: I think it was. I mean, I think Andrew Robb is a fascinating character within the Coalition. He's someone who was head of the Cattlemen's Council, head of the National Farmers' Federation. So he's deeply steeped in rural politics.

But rural politics in Australia has always, really going back 100 years, been divided between the small farmer settlers, who gravitated towards the Country Party and the large graziers, who were more naturally drawn to the, what ultimately became the Liberal Party.

And so I think putting Andrew Robb, who has done, I think, a masterful job in negotiating the free trade agreements that he has in his two years in office, was very much drawn strategically, I think, by Abbott from that Liberal tradition and, I think, to do the job that he's done.

EMMA ALBERICI: Explain for us how our rural sectors and food industry are being protected in a way that other Australian businesses are not?

DAVID UREN: So the... what the Government has done is that it has lowered the threshold before which you've got to seek Foreign Investment Review Board approval, in the case of agricultural business, from about $250 million to just over $50 million.

Now, there are all sorts of odd exceptions in that. So if you're an ice cream manufacturer, for example, you can be taken over if you're worth $250 million. If you're a cheese manufacturer, well, then it's $50 million. And you get these kind of anachronisms across the industry.

But the upshot of it, according to done by the Business Council, is that roughly half Australia's food industry now has much lower levels of, much lower thresholds for foreign investment. And there have also been big reductions in the threshold, even bigger reductions in the thresholds for investment and farmland.

EMMA ALBERICI: Now, in the book you document the history of the Foreign Investment Review Board and you make the bold claim that the Chico Roll changed Australian history?

DAVID UREN: Well, yes. It was a quirky story. Through the early 1970s there were a number of takeovers and there was growing contention about foreign investment in Australia. You had Whitlam leading the Labor Party: he was after a more nationalist approach. You had John Gorton who, of course, was ousted as prime minister by McMahon, who also wanted a much more nationalist approach.

In early 1972 there was a takeover bid for a company, Frozen Foods which made the Chico Roll, by the US conglomerate IT&T. So IT&T started off a telecommunications company but caught the fad for turning its hand to everything. And from some small corner of the empire, they lit upon frozen foods as a likely takeover target.

But at the time, IT&T was a hugely controversial company because it had been exposed for having collaborated with the CIA and trying to prevent the election of Salvador Allende and then had been - there were charges that it had tried to bribe the Nixon administration to stop an anti-trust investigation.

So all this was swirling around. And there were claims in Parliament that, were IT&T allowed to take over the Chico Roll - Frozen Foods - then the same fate that befell Salvador Allende could occur to an Australian prime minister.

The upshot was that there was a two-day Cabinet meeting to try and develop a stance on: what should we do about foreign investment? And it was all centred on the bizarre story of the Chico Roll - which at that time was, I think, selling about 1 million Chico Rolls a week at half-time during the footy season. That really was the straw that broke the back of the McMahon government's resistance to regulating on foreign investment.

EMMA ALBERICI: We have to leave it there. David Uren, thank you very much.

DAVID UREN: Thank you.