The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

17 February 2008

Press Conference

Waterfront Place, Brisbane

Sunday, 17 February 2008

SUBJECTS: Foreign investment principles; Brian Burke; MPs & CEO Wages; Mackay Floods

TREASURER:

Thanks for coming along on a Sunday. As Treasurer, I'm responsible for administering the Foreign Acquisitions and Takeover Act. I want to make it very clear that Australia does welcome foreign investment. It makes an important contribution to the development of our industries and our resources. It creates jobs. It provides access to new technology, management skills and overseas markets.

But as Treasurer, it's my job to ensure such investment is consistent with the national interest. My job to ensure that such investment is consistent with the national interest.

Now in recent months there has been high public interest and commercial interest in investments by foreign governments and their entities.

Now today, I'm releasing some principles. I'm releasing principles that are used on a case by case basis to judge whether particular investments are in the national interest or not, whether particular investments from foreign governments or their entities are in the national interest.

The principles that are set out here are the ones that are used on a case by case basis to make that judgement. It has been the practice of this Government, as it has been the practice of previous governments, to do precisely that - to use a set of principles to make that assessment. And indeed, the principles that I'm outlining today, setting out today, are consistent with the approach that has been put in place by the Foreign Investment Review Board and by previous governments. But I thought it was in the national interest for there to be openness - to set out these principles so they could be there for everybody to see. That's in the interests of the Australian people as much as it is in the interests of investors.

JOURNALIST:

How would that effect Chinalco's investment in Rio Tinto?

TREASURER:

Well, I can't make any comment on an individual basis. I'm responsible for applying the law under the Act. So I can't make any comment about any individual proposal.

JOURNALIST:

Are these tougher guidelines than previously applied?

TREASURER:

These principles have been used by the FIRB and previous governments. What we're doing today is outlining these principles clearly for everybody to see.

JOURNALIST:

Can you give some examples of what sort of investments you'd reject?

TREASURER:

No. I certainly can't, but there are proposals for foreign investment in Australian companies that come across my desk every week and we apply the national interest test frequently and there will be many more to come.

So I don't make public comment about individual cases. But we thought it was important, given the high public interest, the high commercial interest, to set out these principles clearly, openly and honestly for everybody to see. But these principles have been the principles that have been applied by previous governments through the Foreign Investment Review Board, but the Government after some consideration in recent weeks, thought it was very important that they were put into the public in the interests of transparency.

JOURNALIST:

Is this because you are concerned about that there is more interest from foreign parties about investing in Australia than ever before because of the (inaudible)?

TREASURER:

No. Well, certainly there has been an increase in investment from foreign entities which may be controlled by foreign governments, but that interest has been around for a long time as well. I mean, there are many of these sovereign wealth funds around now. State-owned enterprises have been investing in this country for years and proposals have been agreed to in the past. There's nothing new about that.

I think what is new is there has been heightened public interest and heightened commercial interest in these issues in recent times and that's why, as a new Government, we thought it important to have complete transparency.

So we're putting and setting out these principles openly and publicly, although these have been the principles that have been used internally by the Foreign Investment Review Board and the previous government to assess national interest considerations.

JOURNALIST:

Have some of these principles been kept secret in the past?

TREASURER:

No. I don't think it's fair to say they've been kept secret. I'm sure that there has been correspondence from the Foreign Investment Review Board to companies over previous years which, in one way or another, will reflect these principles.

We thought it was important to put them all together and to put them out there in the public, and there are six principles identified that I've handed out today.

JOURNALIST:

Just again, why are you doing this?

TREASURER:

We're doing this because there has been a high degree of public interest in these types of investments in recent times and a high degree of commercial interest in these matters as well. So we thought as a new Government it was important for there to be openness, that our approach would be fully transparent and we thought it prudent therefore to publish these principles.

JOURNALIST:

Can we ask about wages? (inaudible) some of Australia's high paid chief executives exercise some wage restraint?

TREASURER:

Well, these are matters that were addressed by the Deputy Prime Minister in comments this morning, but I'll make the general point that we've called for restraint across the board.

The parting gift of the Liberal Party to the people of Australia was a level of elevated inflation, at the highest levels in 16 years. This Government accepted responsibility for dealing with that inflation legacy from day one and we've said that the Federal Government must take the lead when it comes to restraint. That's why we've indicated not only $10 billion worth of savings in the Budget through the last campaign, but also further savings to come in this Budget because restraint must come first and foremost from the Federal Government.

And secondly, it's why the Prime Minister indicated that he thought that MPs, who are relatively well off, could afford to take a pay freeze for a period of time. And he made the point that he expected to see that restraint exercised by people who are on much higher incomes as well. So we are providing a moral lead. But we've not indicated that we expect there to be a wage freeze across the board. We would like to see restraint across the board from all sections of the community, not just people on modest incomes.

JOURNALIST:

And that would include the high paid CEOs?

TREASURER:

It certainly does.

JOURNALIST:

In relation to Brian Burke, don't you think the Prime Minister should release the emails, then we'll all know what the discussions were between the PM and Brian Burke?

TREASURER:

Look, this is just ancient history. These matters were canvassed extensively through the early part of last year and there was no secret at the time that emails had been passed. I think the Prime Minister made it very clear last year that with the benefit of 20/20 hindsight it would have been better that he didn't have contact with Brian Burke. He put all of the matters on the table then.

I think it's ancient history and I think it's a bit rich for someone like Dr Nelson, who as the Leader of the Opposition, that all he can do is find issues like this because he has no positive alternatives for the future. Little to say about how he would approach dealing with the inflation problem that's been left to this Government. Little to say about industrial relations except to have the practical effect of ensuring that Work Choices stays in place for a longer period of time than it should. This is just pretty negative opposition politics from Dr Nelson. He's stuck in the past. We're focussed on the future.

JOURNALIST:

If it's harmless stuff in the emails, why not release them so everybody knows?

TREASURER:

Well, because it is ancient history and there's nothing new here. Everything that's been on the record today, I think in one way or another, was debated extensively in the early part of last year.

JOURNALIST:

Mackay has been absolutely devastated by the recent flooding. Will the Federal Government be able to provide any assistance?

TREASURER:

Certainly. Our hearts go out to the people of the Mackay district but I think it's now far wider than that. All North Queenslanders know intimately what it's like to go through these episodic events and they can be devastating. I think the Prime Minister has today or yesterday indicated our involvement with the State Government in providing assistance to that community.And our thoughts go out to everybody in that community.

JOURNALIST:

Can you just outline for us what the assistance will be?

TREASURER:

Well, the normal assistance that occurs in these situations. We have a disaster relief approach which kicks in with the State Government, and that is happening as we speak.

JOURNALIST:

So no additional funds?

TREASURER:

Well, there are always additional funds as we assess the extent of the damage. But we're dealing with an event which is still ongoing so I don't know that I can put a final figure on what that may be.

JOURNALIST:

Should Pat Purcell resign from the Labor Party for misleading the Premier?

TREASURER:

That's entirely a matter for the state Labor Party. It's not one that I intend to buy into at all.

JOURNALIST:

What would you say to anyone who says you called today's press conference to take the heat out of the Brian Burke affair with the PM?

TREASURER:

That's absurd. The Government has been considering these matters in recent weeks and we had planned to put this out some time ago and we've proceeded to that timing.

JOURNALIST:

To get back to this foreign investment screening process, you're talking about transparency. Has there been a lack of transparency in the past, I mean, has there been problems with this?

TREASURER:

No, but we've never set out clearly for the public our approach to these matters. As I've said, these principles have been applied and you will find them contained in correspondence from the Foreign Investment Review Board to foreign entities and others in correspondence over a period of time. What we have sought to do, because of the heightened public interest of both investors and others in these issues, is to be completely transparent and to put the principles out in the public domain. They've been referred to in part in a number of ways over the years but we thought a consolidation on the record openly out there for everybody to see was desirable.

Contact: Matthew Coghlan - 0415090850