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Foreign Acquisitions Amendment (Agricultural Land) Bill 2010

CHAIR —Welcome. Thank you for coming today. Would you like to make an opening statement before we start with questions?

Mr Mahony —I can make a brief statement. I would not like to repeat what is in my submission. I am an economist, for better or worse. For the last 10 or so years I have been teaching and researching in international business, mainly in the economics of innovation, the export of education and international systems of production. My other area of research interest with a colleague over the last few years has been in following direct investment, particularly the regulatory regimes around that—specifically on the FIRB with Chris Sadleir, my colleague at the University of Canberra. Most recently I have been looking at the Australia New Zealand relationship and the CER. It is a shame I was not here this morning to hear the teleconference with my colleagues in New Zealand, whom I hope to meet in about two weeks time.

Senator HEFFERNAN —I hope you do better than they did.

Mr Mahony —I will hold that one on notice perhaps. So my interests are both theoretical and practical and my concerns with this sort of legislation reflect those two broad areas. One thing is that, whilst I am not an international trade lawyer, it seems to me that there are questions about whether or not this kind of legislation is at least in the spirit of our international obligations and relationships, particularly our evolving investment protocol with New Zealand. But that is, kind of, a technical matter and the import of that is not just a technical-legal concern of mine, which I am not that concerned about, obviously; it is the effect on innovation in the region and the effect on agriculture and the Australian economy generally—its capacity to innovate.

It seems to me that the last 30 years or so has taught us something, at least in the manufacturing sector—that is, that production is organised on a global framework or network and there has been a growth of alliances and cooperation between firms along the supply chain. Having said that, if there is reason to be concerned about the growth of world food supply—I would rather not use the term ‘food security’—it seems to me that we should focus firstly on the growth of agricultural productivity and how to encourage that growth. Our rules around foreign investment are the enabling framework that the government can offer in encouraging innovation, and foreign direct investment would be part of that innovation.

They are my two main concerns. One is about our international obligations—I am not really expert enough to comment on the particulars of that but rather on the spirit of it—and the second is on innovation. Other subsidiary concerns, possibly unintended consequences—and I would imagine that they have been discussed already—are issues that as an economist seem to me to be fairly obvious: if you restrict the number of buyers, all other things being equal the price of agricultural land may either stagnate or fall, depending on what else happens of course.

Senator HEFFERNAN —Of course that is garbage and a question of MIS.

CHAIR —Please continue, Mr Mahony.

Mr Mahony —Given that all other things are equal, as I said, there is a tendency for the price of agricultural land to be less, perhaps, with this sort of legislation. That would have an adverse impact on farmers who are wanting to exit the industry. It may have an adverse impact on other direct and indirect investors in agriculture, like superannuation funds and other managed funds. They are concerns which I have not done any work on, but it seems to me that they are things that might be considered by the committee if they have not been already.

The other economic comment is on the efficiency of this kind of legislation. I made the point that five hectares is a relatively small amount of land in the Australian context. It may or may not be more or less appropriate in the case of New Zealand, but it seems to me that our average land is quite different to average land across the Tasman. Therefore, it invites a rather regulation-heavy burden on such legislation, for potentially a comparatively small gain.

CHAIR —Thank you, Mr Mahony. I will address that last area first. The New Zealand Treasury did say that their five-hectare limit applies intentionally to hobby type farms. I think the figures varied a bit, but they said there were 100 to 200 applications per year over the whole of foreign investment. If it were down at that level of five hectares I think you would see a lot more in Australia and a lot more activity in that area. Do you think a monetary amount would be more practical or would that hectare amount work better?

Mr Mahony —It seems to me we already have a monetary amount and I heard it commented on earlier as I entered the room that the $231 million, or whatever the figure is this year, was a comparatively large amount. That is a matter for the committee to—

Senator HEFFERNAN —It has never been used.

Mr Mahony —Never been touched. That is the figure I stuck with in my submission. I guess I am saying it in the context of, if you had to have a regulation, then the existing ones appear okay. I have not considered the virtue of having any smaller amounts than that.

CHAIR —I also asked whether New Zealand had done any assessment or benchmarking of their agricultural sector against other comparable countries in terms of efficiency, productivity and innovation. They said that they had not. The tenor of your remarks seems to suggest that you think legislation like this might tend to not allow further innovation and productivity improvements.

Mr Mahony —That is my general comment and belief. It is something I am attempting to research now. I will be in Wellington in early May speaking to at least two of the people you interviewed this morning, so I am a bit loath to pre-empt my view when I am asking their favour to tell me what they think. However, a point I made in my earlier work with Chris Sadleir is that Australia and New Zealand are considerably different countries, even though we are close cousins. They have a much larger reliance on agriculture than we do. We rely now on mining and agricultural employment and output is a relatively smaller part of our economy than it is across the Tasman. Also the type of agriculture that we deal in is quite different. There seems to be good reason why in the last 20 years New Zealand has gone very green and they stress their environmental credentials. Whereas with us, to use a broadbrush description, the broadacre large industrial farm might be more appropriate. It is certainly more common here, whether one likes it or not. What the future holds is what concerns me. In spite of it not always being a happy situation for some, the market will push the agglomeration of farms as we have seen in the US and across Europe. One does not have to say that is a good thing socially or personally and you might seek reasons to inhibit it, but that is what we observe.

CHAIR —Speaking of international situations, you were talking about there being quite a global push in terms of agglomerating farms. Is there at the same time an equal push to try to protect agricultural land in the same way that there is an increasing call here?

Mr Mahony —I am unaware of it because I have not done that kind of research. Our work in the Cairns Group over the last couple of decades would indicate that we are opening up the trade area and investment is intimately related to trade in the modern era. They are not two separate things. I just cannot comment on that.

CHAIR —Are you saying in terms of trade that you cannot open up trade while inhibiting the trade in money, so to speak, and investment?

Mr Mahony —One can but it puts constraints on the type of development and the type of innovation and change you will have.

Senator XENOPHON —You are saying that this could inhibit innovation. On what basis do you draw that conclusion? This bill, which I introduced and Senator Milne co-sponsored, effectively provides for there to be some assessment of the national interest over a certain threshold. I deliberately borrowed the New Zealand model. We heard evidence earlier today from the Overseas Investment Office in New Zealand that they get about 75 to 100 of these applications a year for agricultural land. Their decisions, both approving and rejecting are published. They reject about two per cent. They are subject to judicial review. There have been about four or five cases of judicial review in the last few years and the office’s decisions have been upheld. What is wrong with having that sort of transparent process so we know what we are facing in terms of the broader context of the policy issues of food security and the strategic value of food production?

Mr Mahony —I will start by attempting to address the first question. The numbers we have, whether they be 75 or 100 or more, are only the recorded number of applications, and it is a similar issue with the FIRB here—that the published applications they have may not be the potential applications. Any legislative framework to restrict inflows would deter potential applicants, so there could well be more. I take your point that there is a small number. I again express my learning curve on New Zealand. I was not at all sure that it is largely hobby farms. I understood—and I am chancing my arm here—some of the concern in New Zealand was that overseas organisations or foreign interests might be buying up five-hectare lots and agglomerating them afterwards. That was one of the concerns in one of the dairy cases most recently.

The substance of your question was: what is wrong with having a monitoring process? It seems to me to be unnecessarily bureaucratic and they are relatively small amounts of farmland.

Senator XENOPHON —You are making an assumption there that they are relatively small amounts, but we do not know what the amounts are. Would you be more concerned if another country decided to have a big investment program in Australia for their own strategic or other reasons? Isn’t there a point at which you would be concerned from a policy point of view?

Mr Mahony —You would have to consider the circumstances of the particular case, but under the current Foreign Investment Review Board regulations, as we have recently seen exercised by the Treasurer, there is the national interest provision. I am not sure how much $230 million worth of land is. I assume it is a fair amount.

Senator XENOPHON —It depends where it is.

Mr Mahony —If it were happening and it were blatantly against the national interest, I am sure there would be public concern raised. It is not for me to say when that point is.

Senator XENOPHON —Isn’t that circuitous because the national interest is something that is quite ethereal in the Australian context for the FIRB and in New Zealand it has been codified. They look at the environmental, social and other factors—there is a list of about 20 factors. What would be wrong in codifying to some degree and giving some specific guidelines as to what the definition of national interest is?

Mr Mahony —That is more a specific question on the FIRB more generally and I do not think I would make it specific to agriculture. There has been discussion in the past of us emulating the New Zealand model. In a speech some years ago those sorts of factors, as they call them in New Zealand—the economic, the social and the political—were pretty much implicit in the understanding of the national interest. I thought that was not official but was talked about in that way.

The other argument put is that allowing that sort of political discretion or flexibility could be called a lack of transparency. As I get older, I tend to favour flexibility rather than rules. In the political process when dealing with investors giving the Treasurer or the government of the day that sort of judgment is not a bad thing. But that is a separate political decision to the agricultural issue.

Senator XENOPHON —Although agriculture would be still subsumed by having a codified test, wouldn’t it?

Mr Mahony —I personally do not have any particular concern about the codified test because I think the codified test is not a kind of tick box or a rule box. It still guides the government in New Zealand and they still hold the authority to make the decision.

Senator XENOPHON —No, I think it is subject to judicial review, so there is a slightly different system there. But what is wrong with having that sort of safeguard of judicial review rather than just complete political discretion?

Mr Mahony —I would say that would be a separate act that you should have on the table about amending the Foreign Takeovers Act in that regard. This bill, which I understand you are the sponsor of, is specific to agriculture.

Senator XENOPHON —Yes, and it seeks to codify the national interest.

Mr Mahony —If one is going to codify, I would codify for all interests, whether or not one wanted to include the restrictions on agricultural acquisitions. That is a separate area, I would have thought. I am not being facetious, but would one want to start to lay down quantitative or value amounts for, say, mining? I believe in the early days of the takeovers act, in the seventies, there was talk about these sorts of restrictions. Would one want to restrict access to big mines or to small mines? If so, at what value? It is similar. Would one want to go that far?

Senator CAMERON —Mr Mahony, your analysis seems to be fairly standard neoclassical economic theory—that the market should be allowed to operate and, if globalisation has taken place, people should be allowed just to invest.

Mr Mahony —I am a little cautious about those labels. There is a range of theories that one could hang on to the policy—new institutional economics might be another approach, some sort of post-Keynesian story. I think they would all support the story about an enabling legislation and how the new regulatory state has to develop new ways to be flexible or adaptive to the evolving markets. I would be a bit cautious about the ‘neoclassical’ label, although my thoughts have probably evolved over the last 20 years since we last—

Senator CAMERON —I am not attempting to pigeonhole you.

Mr Mahony —I am sure you would not. If you are inviting me to expand on it, I do not think it is a straight market-driven story. We have a way of moderating and mediating political concern in this country, and it is effective within this committee, within the FIRB and within the Treasury. So it is not as if we have a flat-earth, open-slather approach. The provisions of the national interest test, as we have seen in the last couple of weeks, act as a fairly sharp tool at times, as they did in 2001, so I am not worried about the application of that national interest test in the way that other commentators appear to be.

Senator CAMERON —Are you aware of Professor Dani Rodrik, from Harvard?

Mr Mahony —I am not sure what you are alluding to here. I have heard the name but I do not—

Senator CAMERON —He is a well-known internationally acclaimed economist from Harvard and he argues that there has to be a balance between the market and government, that market and government complement each other. Isn’t this legislation a complement to the operation of the market? This is the point I was raising. I thought you were sort of arguing that the market should apply. But this bill is a complement to the market. What Rodrik argues is that the countries that actually benefited most during the Washington consensus were the countries that ignored the Washington consensus.

Mr Mahoney —Sure.

Senator CAMERON —Is this bill sort of us saying, ‘We want to ignore the consensus and actually get the market and government working together’?

Mr Mahony —I do not see anything particularly cohesive in that way in the way that Japan or Taiwan, in its developmental state period, or Singapore had a range of legislation to support the market and manage the market and complement it.

Senator CAMERON —India, Korea.

Mr Mahony —India has been up and down, hasn’t it? It is sort of in and out of the box. But in those successful areas of state intervention, if you like—in the newly emerging economies of Japan, Taiwan, Hong Kong, Singapore—there are complex reasons of cultural and bureaucratic expertise applied and historical circumstances. I am certainly not against that kind of thinking. I would have to look carefully at the most recent claim of Rodrik’s then, if it is during the most recent period. But I would have to be convinced that specific interventions like this fit that kind of model.

Senator CAMERON —It seems to me that China, Korea and India did not need much convincing, and they have prospered.

Mr Mahony —Again, these were capital controls. There are the state and industry supports, but the distinguishing feature of Malaysia, China and India was that they have not let go of their capital controls. We let go of our capital controls a good long time ago. We have been relatively fortuitous—it was either good luck or good management—since the float of the dollar. We have not needed those capital controls. I have supported them in the past, but it seems that they are neither politically feasible nor likely to return here soon. If the thought is that capital controls would be ideal, let us talk about that in legislation, but ad hoc interventions into one sector, agriculture and this sector, seem to me to be ill-advised.

Senator CAMERON —You describe it as ad hoc if the government took a position that was clearly understood internationally and said, ‘This is how you invest in Australia.’ That is what governments have done in other areas.

Mr Mahony —Sure.

Senator CAMERON —What is ad hoc about that?

Mr Mahony —I guess I am thinking about the size of the restriction at five hectares rather than $231 million. It is a small amount. It creates a lot of bureaucracy. That is the ad hoc—

Senator CAMERON —I am not so much interested in size; I am interested in how you deal with the principle.

Mr Mahony —The principle might be that you want to get rid of the $231 million. I have not thought through the implications of lifting that. As you know, the agreement we have just written with New Zealand—the investment accord that we have with them—go to differential limits. The amount that they can invest in us is much larger than we can invest in New Zealand, by a factor of about four, I think. I have no particular problem with that. That seems to recognise that different size—

Senator CAMERON —We have not been very good at free-trade agreements anyway, have we?

Mr Mahony —Those sorts of differential treatments between countries reflect different institutional constraints or different institutional factors. I am not saying it should be a flat earth. I am not in any way arguing that.

Senator WILLIAMS —You say in your submission that if the status quo remains, any purchase of land of $230 million or less is not scrutineered by the Foreign Investment Review Board, Treasury or anything like that. You are saying that it is a good thing to keep the price of land up or even make it to get dearer, which is good for retiring farmers, which is good for superannuation funds. That is what you are staying in your submission?

Mr Mahony —I am not actually proposing we actively work to keep the price up, but I was just making the observation that, if there are forces that bring the price of land down somewhat or restrict its growth, then it will have impact on these groups.

Senator HEFFERNAN —That is what you call a market, isn’t it?

Senator WILLIAMS —You say:

Australian farmers and others with interests in agricultural land, such as superannuation funds need to consider the detrimental effect of restrictions on land prices and net wealth. Older farmers looking to exit the sector or farmers on marginal land gain from higher prices of land.

So you are saying—

Mr Mahony —That was just a statement of fact, I would have thought.

Senator WILLIAMS —Yes, it is. I want to get you to a point in a tick. So you are saying that it is a good thing that the price of land goes up when superannuation funds invest or farmers want to retire from the land?

Mr Mahony —I am not making a value judgment, I do not think, explicitly in that statement. I am saying that, if the government sees its way clear to pass this legislation, it will have these consequences, and those perhaps unintended consequences need to be considered. That is all I am saying. Ask the farmers and perhaps ask the superannuation funds whether they see that as an adverse effect.

Senator WILLIAMS —Are you aware of the average age of a farmer in Australia?

Mr Mahony —Something a bit younger than me, I would have thought, or about my age.

Senator WILLIAMS —I cannot guess your age from here.

Mr Mahony —I am 60.

Senator WILLIAMS —I think the average age is about 57.

Mr Mahony —That is what I thought—I was close.

Senator WILLIAMS —The point I make is that, if the price of land keeps going up, perhaps as a result of foreign investment—and we do not know who is buying the land; I do not think there has ever been a farm sold in Australia for more than $231 million, listening to Senator Heffernan, and I would never doubt his word—and if it is forcing the price of land up, like those crazy managed investment schemes did in Western Australia, and we just heard about that, how does a young person get a start on the land? That is the serious problem I see.

Mr Mahony —I guess if I could unpack the statement, if that is the question. I am not able to answer the last part of the question. Sorry, I am getting a bit confused. What I would say is that if the price of land goes up, it has a positive impact for those who wish to exit. I think all I am trying to say is that that is the unintended consequence of the legislation. If one thinks that is a way to make more land available for more young farmers, as we tried after the World War II period, one would have to open up other land.

Senator WILLIAMS —Open up other land?

Mr Mahony —I am not quite sure how the state can—you surely would not want to push the price of land down just to make it more affordable for young farmers.

Senator HEFFERNAN —The thing you do not want to do is distort the price of land.

CHAIR —Senator Heffernan, we will get to you next.

Senator WILLIAMS —I saw a graph today—I do not know how true it is—indicating that about four per cent of our land in Australia is foreign owned.

Mr Mahony —Yes.

Senator WILLIAMS —When people invest in Australia obviously they wish to make a profit. You would expect that to be normal, would you not?

Mr Mahony —I would have thought so, yes.

Senator WILLIAMS —That profit may well be then taken back out of our country and you would have a situation where perhaps a company in Japan may borrow money at two per cent. Of course, there is a risk of exchange rate movements. But they could finance the land at a lower interest rate than, say, the average Australian farmer, who might want to buy the neighbours’ property at, say, a seven, eight or nine per cent interest rate. So there would be a case where, first of all, the foreign owner may be able to finance their purchase at a cheap interest rate, subject to exchange rate movements; and, secondly, they take the profit out of our country. Do you think that in the long term it is harmful for our nation to have the profits taken out of our country?

Mr Mahony —I think it happens all the time. We repatriate profits all the time.

Senator WILLIAMS —I am aware it happens all the time. Do you think in the long-term—

Mr Mahony —It is not a question that, to say that it is harmful, you would have to legislate against the repatriation of profits. It just does not gel. If you are going to allow the inward investment, you need to allow it at some time—

Senator WILLIAMS —Would you be concerned if agricultural land of 450 million hectares was, say, 70 per cent foreign owned?

Mr Mahony —Say that percentage again.

Senator WILLIAMS —Say the growth of foreign ownership of our agricultural land in Australia grew to about 70 per cent. Would you be concerned at that, being an economist?

Mr Mahony —I may well be, but I would not be the first one. I think the popular debate would shift and there would be a different debate than the one we are having right now. To move from four per cent to seven per cent and to prefigure legislation or regulations on that basis would seem to me to be rather odd. Could I have one minute to comment on the answer to the question where I got a bit flustered?

CHAIR —Certainly.

Mr Mahony —I have no particular problem, I think as I say in my submission, if the ABS collection that they are working on, I believe, tracks the ownership of land and records it. Again, that is quite a separate issue to legislating to restrict the access, to restrict the ownership. So one question is about recording and record keeping and another question, which this legislation deals with importantly, is a restriction.

Senator WILLIAMS —You are an economist. How do you define an economist?

Mr Mahony —The Greek definition was someone involved with home affairs, basically. It is a very broad definition for those who look at the market and the interaction of the market with social and political affairs.

Senator WILLIAMS —So when a friend of mine once said to me that an economist is someone who has a 50 per cent chance of accurately predicting the past, that was not true?

Mr Mahony —I have a brother-in-law who is an engineer in the Royal Navy, and I make the same jokes about him. Air conditioning they cannot control—or ships!

Senator WILLIAMS —Thank you.

Senator COLBECK —Your submission effectively accepts that there is a process in place to consider a limit and you have said, ‘The existing limit seems reasonable in my mind.’  We go back to Senator Cameron’s discussion about government and the market and the balancing of the two, which is effectively what this piece of legislation is about. It is about applying a government balance. The effect of it is what the argument becomes about, whether it restricts investment, whether it restricts growth in land values—all of those things that you have already discussed.

But if the mechanism that is in place does not do anything because the levels of it are not in the right place—$231 million has never been triggered and you have a process there but it never gets used because it just does not fit the scale of things—then what is the point of having a mechanism in the first place? The judgement has obviously been made at some stage that we will put a mechanism in there, so surely part of the process should be to have it scaled at the right level. If you are going to intervene in a market—and that is what this is about; this is a market intervention putting some parameters around the market—it should be at a level so that it actually does something. I am interested in your position on the idea that the limits are right, because the limits do not do anything.

Mr Mahony —This is a bill to amend the Foreign Acquisitions and Takeovers Act of 1975. That act from 1975, which—as I understand it—was well argued over and has been in place for some time, covers a broad range of Australian industry and sectors. As I was pointing out in my earlier comment, this is not a general amendment of the bill in terms of the coverage; it is selecting a particular sector and saying, ‘We’ll have special circumstances for this.’ I appreciate that we already have them in terms of domestic accommodation and, I believe, the Keating legislation, which I feel was ill-advised at the time. Rather than go further down that path, if your concern is that the amount is too high I would invite discussion of a smaller amount of money; but to be trying to cut into each industry with specific limits—would the next amendment be to amend the treatment of mining to restrict large or small mines?

Senator COLBECK —That is a legitimate question, but we are talking about a piece of legislation that is sitting before us. It has—

Mr Mahony —That is the principle that I am arguing about. It is not—

Senator COLBECK —I understand that; but in this circumstance we have heard a range of evidence about what general values might be for a sale of a property within the agricultural sector. I am not trying to say whether or not I agree with the five hectare limit or anything like that—that is not what I am about. The New Zealanders have had a debate and made a decision about the values they are looking to deal with as part of their process. We are now doing exactly the same thing here, but, if where it is all set at the moment does not do anything, there is obviously no point to it. So I am just trying to get a sense of, if you are going to be in there, where a reasonable level is.

Mr Mahony —I would say: what sort of factors are so pressing that they make this bill imperative; what sort of adverse effects are so obvious and so ongoing that they make this amendment important?

Senator COLBECK —The other side of that and part of the answer to that question is: what is actually driving the international investment into our agricultural sector now, and is that an issue that we need to be concerned about? They are the two questions that fit beside that.

Mr Mahony —That is the point I am trying to make.

Senator COLBECK —So, if you are looking at issues that Senator Heffernan and others have raised, where there appear to be strategic investments into agricultural land in certain jurisdictions around the globe and perhaps some here, should we be looking at that and trying to work out how we manage that in our interests? What is happening is obviously in the interests of those who are making the investments.

Mr Mahony —That goes without saying. But the interests of those making investments and ours might not be at odds, and I think the burden of proof is on those who object to these investments to show how they are detrimental to our interests. Just the question of ownership—

Senator COLBECK —I will let Senator Heffernan loose at this point.

Senator HEFFERNAN —Thank you for your evidence so far, but it has just been bureaucratic mumbo jumbo. Can I take you to the question of sovereignty. Do you understand what we understand sovereignty to be?

Mr Mahony —I think I would like it clarified because it seems to have two different meanings of late. One is the—

Senator HEFFERNAN —We are an island continent—I will leave it specific to Australia. We control who comes and goes, the land, the economics and the Army.

Mr Mahony —That concept is clear.

Senator HEFFERNAN —You understand that?

Mr Mahony —I understand it, yes.

Senator HEFFERNAN —Do you understand that globally we are losing that concept of sovereignty due to free trade agreements, economic rationalisation, modern communications, modern transport, non-market currencies and sovereign wealth funds? Do you understand that we are watering down the concept of sovereignty? For instance, we cannot actually test apples coming in from New Zealand for antibiotics because we have a closer economic arrangement with them, not because it would not be a good idea.

Mr Mahony —Having lived in Europe for 10 years, I understand that the formal notion of this is that states, via their parliaments—I am not sure what the correct term is—accede or give up some of those aspects of their sovereignty, as when they join the European Union.

Senator HEFFERNAN —Leave it at that; we are running out of time. Do you think that in the long term this is a good thing for the country? The crucial question around why we are here today is not foreign investment—that is no big deal—it is sovereign foreign investment. Do you think it is fair enough, given the decline in the concept of sovereignty, while we sit around and watch the fact that by 2070 China will have to feed half its population from someone else’s resource, that we can allow a non-market driven currency such as China’s to come in here—bearing in mind that the US is technically insolvent—and acquire our sovereign assets and then exclude us from access to the assets? They do not want a return on their money; they want to secure the food task by 2050 and 2070. Do you think that is fair enough?

Mr Mahony —I thought the act referred to ‘foreign’—

Senator HEFFERNAN —I am not referring myself to the act. Forget the act.

Mr Mahony —I am sorry, the question was about sovereignty and the legislation before the committee.

Senator HEFFERNAN —No, it is about sovereignty. I am not referring to the legislation. I am trying to get into your head on the concept of sovereignty.

Mr Mahony —If I could defer to the chair, my invitation was to speak about the act, not to make—

Senator HEFFERNAN —And take questions relevant.

Mr Mahony —I am happy to run for parliament someday, but—

CHAIR —That is right, and we have several times had to ask senators to come back to the topic.

Mr Mahony —I have a wide range of views that I could share in a bar later.

Senator HEFFERNAN —The whole reason we have got the bloody act is that we have not thought through beyond the next election where Australia is going to be in 50 years. That is why we are here arguing about this. But, if we are going to lay the right foundation stones to make reasonable considerations of the likes of Senator Xenophon’s act and the future of the country, we have to actually get through the heads of people like you, who make a living out of what you are doing today—God knows how they pay you.

CHAIR —Senator Heffernan, as you pointed out we are running late. This really is not on the—

Senator HEFFERNAN —This really should come down to a question not of foreign investment but of where we are going to allow sovereign investment to start and end. Do you understand what I am talking about?

Mr Mahony —I understand the debate, but I—

Senator HEFFERNAN —But you do not want to talk about it?

Mr Mahony —I am happy to talk about it.

Senator HEFFERNAN —Go; talk about it.

Mr Mahony —But again I would defer to the chair.

CHAIR —The question is whether we should be talking about it during his hearing, when we are running late. This is a legislation committee and we are dealing specifically with the topic of this bill; we are not having a general philosophical debate.

Senator HEFFERNAN —See you later.

CHAIR —Thank you, Mr Mahony, for your attendance.

 [3.06 pm]