The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Bill Shorten

Bill Shorten

Minister for Financial Services & Superannuation

14 September 2010 - 1 July 2013

Transcript of 29/06/2011

NO.006

Interview with Fran Kelly

ABC Radio National - AM Breakfast

29 June 2011

SUBJECTS: Foreign investment; food security

Kelly:

Assistant Treasurer Bill Shorten has ministerial responsibility for this area, Minister, welcome to Breakfast.

Shorten:

Good morning Fran.

Kelly:

Forty three farms worth collectively $213 million dollars bought up by one mining company, was that purchase subject to Foreign Investment Review Board approval?

Shorten:

Well, the Shenhua... in preparing for today's interview I went and checked with the Foreign Investment Review Board, I've been advised that for a lot of the specific information around the Shenhua acquisition, it's commercial in confidence. But the short answer to your general question is that where it's a government entity from overseas, there's no $231 million threshold before the government takes an interest, it's from zero dollars.  So Shenhua would have briefed the Foreign Investment Review Board before the deals were done.

Kelly:

So F.I.R.B would have looked at this and signed off on Shenhua being able to buy this land?

Shorten:

The F.I.R.B examines all direct investment by foreign government entities, there's a bit of a misapprehension, and I listened to that quite informative interview of the real-estate chap beforehand, but there is a threshold of zero dollars if it's a government entity.

Kelly:

So therefore what national interest test would F.I.R.B have applied here?

Shorten:

We apply a national interest test, we look at all our matters; does it support our national economy? Does it improve our trading position? Are there implications on jobs?  When  F.I.R.B get an application they notify state governments, they notify a range of government departments just to see if there are people who have a view, from national security through to the state governments.  We are increasingly conscious of environmental issues...

Kelly:

What about issues like food security and the impact of farming communities?

Shorten:

Well I think that's going to two points; first one is we are working on a national food security plan with Minister Joe Ludwig, so we are conscious of the need to make sure that all of the deals fit together, as opposed to just taking each deal as a one off.

The second point it goes to is an increasing competition in some parts of Australia between mining and agriculture generally.  That's a deeper issue which doesn't necessarily go just to the identity of the mining company; so the Chinese mining company, an American mining company, or an Australian mining company, it appears to me that there is increasing concern in some communities about mining companies acquiring agricultural land generally.

Kelly:

Yes well that's what Tony Windsor for instance, the independent MP, he lives on the Liverpool Plains, he says locals are more concerned with the impact of mining activity on the flood plain than the impact of a Chinaman on it.  Is that the real issue and is that a concern for the Government? And how close attention is the Government paying to that balance?

Shorten:

Well I think there is two sets of issues, one is still foreign investment, I think that's an issue, I think there are other concerns in the community; do we have enough food in Australia if other nations are seeking to acquire food assets and agricultural assets? But what does that mean? So that's one issue, the other issue is the usage of the land, the competition between mining and agriculture.  On the second one, mining licences are a matter for the states, I know that whenever there is a problems its Canberra's fault but whenever its any good news the states put up their hands.

Kelly:

Well I think people just want to find out what are our Government, State and Federal doing about this.

Shorten:

Yeah, I'm answering your question.  What I'm saying to you is mining licences and the use of land is a state area.  In terms of the foreign investment and the identity and the conduct and the ramifications for ownership, that's a national area that's why in particular in agriculture, when I've come to the portfolio in the last eight months I've realised in my opinion there is an absence of good statistics. 

Foreign governments get their sovereign wealth funds, foreign owned businesses, they get their deal analysed from zero dollars but for private concerns it kicks in at $231 million.

There is an increasing interest in food, there are a couple of other facts though when we look at that, 60% of all the food we grow in Australia is exported, 90% roughly of all the food that you and I and 23 million other Aussies eat, 90% of our food is grown here.  Food exports are a big part of our agricultural value chain and deliver good money for people, so we're not about to run out of food any time soon.  

In terms though of who owns what land, there's never been in the history of federation really good national statistics about who owns what. And remember it wasn't always just the Chinese and the Qataries buying it, we had Lord Vesty who owned all... the British Lords and the Duke of Westminster, they owned plenty of Northern Australia since European settlement. So we've always had someone foreign owning some of our assets, the question is making sure it lines up with our national interest, that's why we've got ABARE and ABS currently providing us with a report by October into who owns what.

Kelly:

OK and just very briefly, we're out of time, but then for calls to lower that bar for the F.I.R.B test, from $231 million is the government going to consider that?

Shorten:  

I've met with Nick Xenophon, he's got a proposal which is based upon New Zealand, I think it's fair to say that New Zealand have a lot of small farms so introducing a $5 million threshold is a New Zealand test.  I'm not sure the broad acre farming in Australia is the same as New Zealand but we'll keep meeting with them.  Let's put some science into the debate, because we are a trading nation and we don't want to discourage foreign direct investment in Australia, we just want to make sure it's consistent with the national interest.

Kelly:

Bill Shorten, thank you very much for joining us

Shorten:

Thank you