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Transcript of interview with Ray Hadley: 2GB: 22 August 2016: foreign investment; foreign investment applications for the 99 year lease of Ausgrid; S. Kidman & Co; education funding; making superannuation more sustainable; Rio Olympics

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The Hon. Scott Morrison MP Treasurer



Subjects: Foreign investment; foreign investment applications for the 99 year lease of Ausgrid; S. Kidman & Co; education funding; making superannuation more sustainable; Rio Olympics.

RAY HADLEY: Treasurer, good morning. Nice to talk to you, you’ve ruled a line through these two Chinese bids for Ausgrid assets, is there any way that could satisfy you or is that it, that’s finished, kaput?

TREASURER: Well that transaction and the proposal that was put to us, that’s now finished. Now the NSW Government is back out there and they’re looking at new structures and new ways forward and we’ll work closely with them on that. But the national security issues, they’re very familiar with and I’m sure with whatever proposal or process they move forward with they will continue to work closely with us, but that deal, is done.

HADLEY: S. Kidman the properties, the pastoral properties, extensive property holdings, you’ve knocked on the head, where are they up to?

TREASURER: Well it’s with them at the moment. On two occasions I’ve rejected that proposal. The first one, was a much bigger parcel which involved the Anna Creek Station which was near Woomera and there are national security issues around that. But then I, prior to the election also, ruled a red line on the second proposal. I mean it is just too large a holding. That’s the bottom line. That’s what I said. I thought I was pretty clear about it at the time. The Australian government remains open to foreign investment. There are other broadcasters who are pretty regularly critical of me when it comes to foreign investment, and that’s fair enough, that’s part of the process. But, you know we continue to approve other transactions. It’s important that we get investment into our agriculture sector. Earlier this year in January there was eight properties, Milton Downs, Koramba Aggregation, Baroma Park, all of these. There was a $467 million transaction and that was sold to US, Canadian, Dutch and Swedish interests. I didn’t hear a lot of protests about that one. So we’re continuing, consistent with the rules, allowing foreign investment, where we don’t think it’s contrary to the national interest. There have been some other controversial ones, the Tasmanian dairy one, VDL. I mean that was owned by New Zealanders and sold to Chinese…

HADLEY: …and before that it was owned by the British as I understand.

TREASURER: And then there was the Carlton Hill property, well that was owned previously, [inaudible] by UK interests and it was sold to Chinese. So look, investment in our agricultural sector is incredibly important for the jobs and the productive capacity and productivity and what we can earn, and so we haven’t slammed the door shut on all that, but, where there are proposals which I consider contrary to the national interest, well I’ll say no.

HADLEY: What about local buyers, super funds for instance? What about the Future Fund, what about buying some of these assets given, and I know that we had the discussion about how much


the Commonwealth bank is worth now, and how much it was worth when the government unloaded it back in the 1990’s. What about organisations either super or the future fund getting involved in buying these assets which, you would hope, increase in value over time?

TREASURER: Well there’s nothing stopping them from doing it at all…

HADLEY: Would you encourage them to do it?

TREASURER: There’s nothing to stop them from going along and bidding today. For example, some industry funds won’t allow their funds to be invested in coal shares. Now, that’s got nothing to do with returns necessarily, that’s got to do with politics and their view about those particular issues. It’s not uncommon for super funds to take a position which isn’t just about returns. I think Australians and the Prime Minister and I are frustrated that we’re not seeing more of that $2 trillion in capital which is there in Australian superannuation savings, not lining up on these sorts of transactions, whether it’s those agricultural stations or whether in fact it’s the electricity assets like Ausgrid. So there is an opportunity now, I think for them to engage in that and for example on the Ausgrid sale or on those other properties like Kidman for example, where there are some bidders who will price everyone else out of the market, well clearly based on my decisions they’re not in that race. So, hopefully, I would like to see them appearing in the next round of transactions.

HADLEY: Well you’d hope those union controlled super funds who won’t invest in coal didn’t get involved in the wind farms after what I read over the course of the weekend.

TREASURER: Well they may well have Ray, my simple point is that it’s an argument about returns when it suits them, and it’s an argument about politics when it suits them. So, I think all Australians would like to see superannuation funds invest more in our own country, and in our own industries, and they’ve got the opportunity to do that. But as the Treasurer, I don’t want to go around mandating that with more regulation and more laws and…

HADLEY: No but you could encourage it.

TREASURER: Well here I am on your wonderful program encouraging them.

HADLEY: Now speaking of encouraging people, the universities seem to be forever screaming out for funding. So I’ve just gone through it at the start of the show and I think you may have been with me the story documented in the News Limited papers today that Courier Mail and the Telegraph about bazar arty study projects for all sorts of universities ranging from $100,000 up to $500,000. One of them includes, here it is here, have you heard of that word by the way, you’re much for learned that me. F-E-C-U-N-D-I-T-I, which is about ideas apparently.

TREASURER: Apparently. There you go, we all learn something every day.

HADLEY: OK well I’m in good company then, I thought I was a complete imbecile. Apparently not.

TREASURER: Only as silly as me Ray it would seem.

HADLEY: In which Tibetan and Western Scholars work together to develop analysis. Now, then we’ve got office gossip, then we’ve got poor obese people, then we’ve got warfare in ancient Tonga. I mean, I know the Prime Minister and obviously you have cut funding by $68 million after the ARC, the Australian Research Council gave $357 million in grants to 899 research programs in 2016. But, do we need to be giving people… here’s a good one $105,000 at the Monash University, this project proposes a new philosophical vision of what it means to be human. I mean, fair dinkum.


TREASURER: Well look, all of these decisions are made, as you’d expect independently at arm’s length by the boards we put in place to do that…

HADLEY: Yeah but only because you’ve given them money.

TREASURER: Well the alternative Ray, is that the Treasurer and the Finance Minister sit round making decisions about research grants, for $5000, and I think there’s better ways for us to apply where we need to focus our attention. Now we expect total accountability from all of these bodies and I think what you’re pointing out will raise a lot of concern in people’s minds. It certainly does in mine, but we do have tighter and increasingly tighter controls on this. Minister Birmingham is looking to further increase controls on that. For example though, when you look at sometimes just the headline items of these research projects, and I know it makes them good retail copy on occasions but there was a project a while back which had to do with the research into snails and it copped a lot of flak. Well, that was actually a project that was looking at the infestation of particular insects that were destroying crops. As you would expect that has a pretty significant impact on Australia’s productivity. So, I would say look beyond the headlines of some of these projects. I think some of them will raise questions but others I think might have more value than it first looks like.

HADLEY: I don’t expect you and the Prime minister and highly placed government elected Parliamentarians to sit around a table but what you could say to the vice chancellors is look we have got a new rule. It is called the pub test and what you need to do is go out a pub in Chermside or one in Western Sydney…


HADLEY: And sit around the public bar and say, listen boys we have got $414,000 here we are going to spend it on the cross cultural philosophy today in which Tibetan and Western Scholars work together to develop analysis - do you think we should spend $414,000? As opposed to, we want to look at a snail that is destroying Australian crops. It is the pub test - that is what it is.

TREASURER: Look, it is a fair point Ray and I think it shouldn’t be lost on those who make these decisions and it certainly is not lost on us and we expect them to take into account public support for these types of activities, like you have to do across any level, whether it is sports funding, any level of funding. Those who make those decisions whether they are bureaucrats or ultimately politicians you need to be mindful of that.

HADLEY: Here is your chance today on the program to write a dreadful wrong that you and I discussed ad infinitum in the lead up to the election. You can simply say Ray, today we are going to lift the $500,000 non-concessional contribution to $750,000 after being petitioned by people within our own party.

TREASURER: Well, Ray, we are still working through that process with my colleagues.

HADLEY: Come on.

TREASURER: And I am still waiting for your proposal, given you have put this to me so strongly over a long period of time, about where we make up the other $250 million to $550 million.

HADLEY: Well, you don’t need to convince me you need to convince your own Party.

TREASURER: Well, this is the process we are working through Ray. I am doing that. I am doing that with my colleagues around the country. We are sitting down, in open conversations, behind closed doors and working this through. I am not negotiating this through the media, I am doing it directly with my colleagues as you would expect.


HADLEY: Well, you see the ambit claim as some say ‘look, Scott, bump it up to a million. You are at $500,000 give us another five’. And you say, ‘look, you know we will find the savings somewhere else. Let’s bump it to $750,000 and then everyone is happy.’

TREASURER: Everyone always says they will find the savings somewhere else but they only even start thinking about it once the money is spent and the savings don’t turn up, Ray. As Treasurer what that means is your taxes go up because the deficit gets bigger or the debt goes up. So, I am not going to rashly move on this. If there are to be some amendments here then the Budget needs to be restored as a result of any changes there and so I will continue to work it through with my colleagues. Ray, we can’t just keep saying ‘oh well we will make a concession here we will make a concession there’ and make it up somewhere else. If we keep going down that path then our kids are going to have a bigger debt and they are going to have to pay for the fact that our generation didn’t live within its means. If someone wants to put a million bucks after tax into their super so they can pay 15 per cent on it rather than their marginal tax rate and they had already cleared the $1.6 million then I would find it pretty hard to look my kids in the eye and tell them they have got to saddle a higher debt because someone who had a very big income wanted to pay less tax.

HADLEY: $340 million has gone into Olympic sports over the four years leading up to Rio. Now, I was a bit surprised and probably naïve when I was reading literature recently about the AIS in Canberra, which I think was one of the great initiatives to select people there and house them there and the different disciplines come together. From what John Coates has said over the course of the weekend, the boss of the AOC, that has almost been dismantled and it is sort of a piecemeal type organisation now. Given that it is so much money but there is great benefit for kids getting involved in sports and getting fitter and all the rest of it, do you think we need to have a bit of accountability from the various boards or do we have a reintroduction of the AIS the way it was in the old days?

TREASURER: Well, over the last four days we have invested $340 million in all of those programs and I commend all of our athletes in Rio. I think they have done us proud and we are very pleased with their efforts. I think all Australians are - not just those who obviously took away medals but there were some really inspiring performances there and that is what sport is all about. It is meant to inspire us. I remember being a kid watching the Olympics back in 1980 and 1984 and all that sort of thing and thinking about the guys back then and all of that sort of thing and thinking about the guys back then. It is a bit like when I told you a little while ago, sport does this. I was at a function for the legends program and league and I was sitting there with George Peponis and Bill Noonan and Ron Coote and all of these guys. Now, these are all the guys that used to be on my footy cards when I was a kid. Those guys whether it is in football or other forms of sports they give you some vision, they give you some inspiration. So, I think that is what sport does for our country. The programs have to be accountable and we invest generally in sport. But the reason for it at the end of the day is so young people, people at all ages remain active, remain physically active. Sport also builds community. I know that in my own electorate in the Shire and in southern St George. Sport is actually today what brings more of the community together on a regular basis than anything else and that is incredibly important.

HADLEY: I don’t dispute that but we have over the last eight years gone backwards. Now, it started in 1981 the AIS and I think it may have even been a Prime Minister from your side of politics who opened it, in Malcolm Fraser.

TREASURER: It was, after the ’76 Olympics where we didn’t win a medal.

HADLEY: Yes exactly. Now, obviously we haven’t got to those particular stages. The Brits are leading the way now. They were going like busted behinds so they started a lottery style operation where the money got invested into sport and people participated in the lottery knowing that it was going into sport. Now, all of a sudden they have gone from being, you know, the cap catchers to finishing


second in the medal tally behind the United States of America. All I am saying to you is all of the things you say are valid about the adulation that is showered on athletes - and I am not trying to diminish the efforts of those who have been successful - but in general terms we need to have a rethink about the way things are done, particularly at the AIS.

TREASURER: Well, this is a normal process after every Olympics I understand. They go through and they look at what happened not unlike an athlete would go over their own performance and look at what they have to improve for next time. That process will happen but there is obviously a limit to how much can be spent so you have to spend it the best way you can…

HADLEY: Wisely.

TREASURER: Yes and any club will do that a Government has to do that with its sports program and I think you can have every confidence they will. But eight gold, it is the same gold as last time but more importantly I think those athletes have inspired another generation of Australians and good on them.

HADLEY: Alright, as always, thanks for your time.

TREASURER: Thanks Ray, it’s good to be with you.


Further information: Julian Leembruggen 0400 813 253, Kate Williams 0429 584 675