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Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

6 April 2011

Interview with Marius Benson

ABC News Radio

6 April 2011

SUBJECTS: SGX - ASX Proposal

BENSON:

Wayne Swan why was this decision taken? Why did you take the decision to knock back effectively the merger, or is it a takeover, by the Singapore Stock Exchange of the Australian Stock Exchange?

TREASURER:

Well, Marius I think it's pretty important that we all understand the process here. The foreign investment review process demands that we give the parties an initial view and an opportunity to respond. Now, that's what I did yesterday and yesterday the Singapore Stock Exchange and the Australian Stock Exchange chose to make it public.

Now the advice I gave them yesterday was that it was the unanimous advice of all FIRB members that the takeover would not be in the national interest. So the parties yesterday were informed that I intended to take that decision and given an opportunity to respond.

BENSON:

Yes and they responded. Mr Bocker the head of the Singapore Stock Exchange has responded by saying he's not coming back with a new deal, it's off, it's not going to work.

TREASURER:

Well, he has said that publicly, but I've given them the opportunity to respond; that's what I must do in terms of procedural fairness. That is the advice of the Australian Government Solicitor. It's very important to understand that we take this process very seriously. Australia welcomes foreign investment. We've got an open and transparent process and I've acted in accordance with well established guidelines and legal advice.

BENSON:

The point a lot of people are making is that FIRB - the Foreign Investment Review Board - very seldom says no. Why is it saying no on this occasion?

TREASURER:

Well, when I take a final decision I will publish all of my reasons in full and part of that will be the advice from the Foreign Investment Review Board. What you have to understand here is that there has been a process in train for many months. The FIRB has consulted widely. They have consulted with the proponents and they have consulted more generally. They've consulted with our regulators. They've consulted with the financial sector. So there's been wide consultation. The fact is that I've also consulted widely as well. I take my responsibilities under the act very seriously. This is a decision for me as the Treasurer, it's not a government decision. I welcome foreign investment, but ultimately all proposals have to be in our national interest.

BENSON:

Well, can you just clarify, what in your mind had made this proposal against the national interest?

TREASURER:

What intend to do is to publish my reasons in full when I take my final decision. I can't canvas all of those reasons, but I understand this proposal is one that has been put forward and deserves thorough consideration and a thorough response. When I take my final decision the detail will be there for all to see.

BENSON:

People are saying in the financial world that mergers are the way of the future, that London's taking over Canada, that Germany is moving on New York. You are standing Canute-like in the way in the trends of the future.

TREASURER:

Well, I certainly reject that commentary. There are serious issues here. There is no doubt there is consolidation going on around the world. Australia is very open to the world and the world is very open to us, but ultimately on these proposals I have to give thorough consideration and come to a decision in the national interest. When I take that final decision I will outline all of my reasons in full, including my response to that proposition.

BENSON:

Are you disappointed that Singapore is not coming back with a new offer?

TREASURER:

That's entirely a matter for them. What I have to do is to act on the advice of our legal advisors and well established processes. Because this is such an important proposal it is very important that the proponents are given procedural fairness. That's what's happened on this occasion.

BENSON:

Was it a tough decision for you or was the evidence clear?

TREASURER:

Look, I've given this a lot of thought. It first was published towards the end of last year. I've spent a lot of time reading material, seeking advice, consulting with the business community and the wider community. I've taken it very seriously and I didn't start from, in that process, with any pre-established view. I've had a very open mind about it, but as I've been through the process, as I've considered all of the material, as I've consulted widely, I've come to an interim view, if you like, of which we informed the exchanges yesterday. That's a process of something like five months.

BENSON:

Some people are suggesting that this will harm Australia's international standing.

TREASURER:

No, I don't believe so. I have consulted widely. I know that there are some who will bang a drum with their own particular view and their own particular commercial interest, but I have consulted widely, particularly in the financial sector here and abroad and there are some very clear views coming forward to me through that consultation. But I will deal with all of those issues when I publish all of the reasons in full, after I've taken my final decision.

BENSON:

Laura Tingle writing in the Financial Review this morning says there were plenty of dark suggestions and scepticism going around yesterday implying political interference in the FIRB process. Was there political interference?

TREASURER:

Absolutely nothing could be further from the truth. The FIRB board is independent. They do their work. They take their decisions independently. They talk to me as the responsible minister. They have made a recommendation to me. It's a recommendation which they spent a lot of time on and they worked their way through.

BENSON:

Wayne Swan thank you very much.

TREASURER:

Good to be with you.