LEON BYNER:
Treasurer, thanks for joining us this morning.
TREASURER:
G’day, Leon.
BYNER:
Now, I know that you are incumbent to some degree by national security issues but let’s see if we can at least kind of tease out…
TREASURER:
You can try, Leon. You can try.
BYNER:
Now, hang on, I am not going to try and tease out national security stuff but I will tell you what was said. Now, we have had Bob Carr leading the charge, and he is not the only one to say this, that the company that you have knocked back already has, two – one in SA, one in Victoria – they already own the distribution system and according to what was put out in the media yesterday they had permission to make a bid. Now, in that text, how can it then be that through national security issues, I am sorry we are not going to put this through because there is not a national interest here served because of national security? Can you somehow explain this to people who say that, well these things are anomalous. Can you make them less anomalous?
TREASURER:
Yes, I can, Leon, and that is a fair question, obviously. Just because someone is able to own one asset, doesn’t mean that that means they can own another one. What I mean by that is, every asset and every transaction is different and the decision I, the preliminary decision I should stress, that I have made on this specific transaction is very specific to the circumstances of both this asset, its character, what it does, how it operates, and the structure of the transaction that has been put to us both on ownership and on control of the asset. So, what I mean by that is every case is different, Leon. Simply because a company in another state, on another asset, in a different structured transaction can do something there doesn’t mean they can do something elsewhere. I am disappointed that some commentators on this, including one who used to be a Foreign Minister, I would have thought would have understood that, but he wasn’t Treasurer so perhaps he wasn’t exposed to those processes when he sat on the National Security Committee. That is quite usual. The other thing is this, Leon, and that is what is called the aggregation principle. Now, it wasn’t relevant to this decision because the national security issues already were trumping everything else in relation to this decision but you can own one, perhaps, arguably, and there will be plenty of people who think that is too many, but that doesn’t mean you can own two or three or four. There are very real issues that relate to aggregation principles as well. What I can assure Australians and South Australians in particular through you, is I make these decisions case by case based on the best national security advice that is available to me. As you would expect, in these situations, the quality of that advice and its rigour is at a very high standard.
BYNER:
Is this because in the case of this rejection and the case of the acquisition that you have got, basically a private company, but it is state-backed. Is that the issue?
TREASURER:
Well, no, I didn’t say this was a country specific decision either. What I am stressing, and I really can’t say any more than this, Leon, is there were very specific characteristics of this asset and then how that related to the structure of this transaction. So, both the structure of the transaction, the fact that control of operations was a factor here, accentuated those risks and then on top of that you have just the broader national security issues that relate to the asset as a whole.
BYNER:
Alright, so 50.4 per cent was the bid. Again, if they made a lower percentage bid would that abrogate some of the things you are concerned about?
TREASURER:
Well, I am not going to speculate on any of those things. I don’t think you would expect me to but I should also stress that when people own things that doesn’t necessarily mean they can control things either. I mean there can be passive investors; there can be active investors – as you know. So, what I am saying is there is a complex web of structures and arrangements that can be put around these types of things. The web, I suppose that was put to us did enable me to apply the sort of mitigations that have proved effective in other asset sales. Those mitigations which I stress, say, for the TransGrid sale in New South Wales, we have the toughest mitigations on a foreign investment approval that there has ever been put in place in this country. And, even those were not deemed effective for what we had to protect on this very specific occasion.
BYNER:
Alright, I have got a couple of listener questions here which I will read to you. One is that do we now assume because it is a national security issue, and this is good that you can clarify this, we have got already assets – gas, electricity – owned by the same people who are now not allowed to own the Ausgrid or have a controlling share. So, is it the case or is it not that there is a national security issue with what they have got currently or not so?
TREASURER:
Well, no. Those cases, and some of those were before my time, but they would have gone through a similar process to this. Every asset, every transaction is scrutinised on its specific characteristics. So, when previous Treasurers have approved those arrangements, well, that has been based on a very similar process to the one that I have gone through.
BYNER:
So, now they have got a week to come back with a different offer. How does that work?
TREASURER:
Well, look, it is a process issue. So, that is why I have said it is a preliminary decision and there is a national justice process that applies to these sorts of decisions under the rules and it was the same thing that occurred with Kidman, Leon. Remember, I made a preliminary decision on Kidman and those, which was a negative one, and then they chose not to proceed any further with it and the preliminary decision effectively became the decision. Now that is a matter now for those bidders if they wish to either proceed or make further applications, that’s a matter for them. But there is a very strict timetable on that.
BYNER:
There are a couple of things that have been mentioned today in the commentariat of our national newspapers that you have been spooked by Bob Katter or the Xenophon group or indeed the Hanson Senators...
TREASURER:
That is crap. It is complete crap. Look I engage with all of them and I have. I was down in South Australia the other week and had a long and productive session with the Xenophon team. But I make these decisions based on the serious considerations of the national security information that is presented to me. These decisions are made under the law by the Treasurer after there has been a review by the Foreign Investment Review Board. What I do is not only take that advice from the Foreign Investment Review Board who also consults with all the various national security agencies and remember I put David Irvine, the former boss of ASIS and ASIO on the Foreign Investment Review Board so I could have greater confidence about the scrutiny of these national security issues coming through FIRB. I take that recommendation and advice that comes from FIRB and in cases like this I will go back and deal directly with the national security agencies themselves and hear directly from them. Now ultimately the Treasurer has to make a decision and that is a decision that is made by an elected official, not an unelected board albeit appointed by the government and so I carry the can for those decisions and I know there have been some that you and your listeners have not liked, others that you have but that is the responsibility that the Treasurer takes.
BYNER:
Alright. The census, how much has it cost us so far?
TREASURER:
Well the census over the five year period is a $470 million exercise, just over $200 million in the current financial year. As you know, as everyone knows, there was a very difficult problem the other night….
BYNER:
Yeah how much has that cost us?
TREASURER:
At this stage I don’t have any report on that but there is no reason to think that that would have generated any additional cost at this stage.
BYNER:
Really?
TREASURER:
Well they are already under contract to fix this and they have already been paid under the contract to fix these problems.
BYNER:
So you are telling us that whatever went wrong that shouldn’t have, that the Prime Minister has said heads will roll, will be borne by the contractor?
TREASURER:
Well I wouldn’t see why that wouldn’t be the case. I mean they are paid to deliver a service that was supposed to deliver the redundancy and the capacity that was contracted to provide. Now that is what we expected them to deliver. They were the assurances that I understand and am advised were given and people have proceeded on that basis. That’s why the Prime Minister and I and Michael McCormack, the new Minister, are pretty filthy about it.
BYNER:
Well the latest advice is to do the census on your phone.
TREASURER:
Well I did it last night on my iPad and to be fair that was the easiest census I have ever filled out. I think the online version of the census is far superior to doing it on paper. It is quicker, you do not have to fill the same thing out over and over again…
BYNER:
I did it in 12 minutes.
TREASURER:
Yeah I think it is a very good online form. We should remind ourselves that the other night the reason why it went down wasn’t because it crashed, the reason it was taken down and the decision was taken by the Chief Statistician was because he had a concern based on a false positive that data may have been going out. Now the Australian Signals Directorate, the most authoritative body in the country on these issues has assured the government that that did not occur and all the data is absolutely safe. But the ABS was, if they could be accused of being overly cautious - but when it comes to the privacy of people’s data I think that is what Australians would have liked them to have been in that situation.
BYNER:
So just to clarify this, has it or has it not cost us any extra, this debacle?
TREASURER:
I have no advice to me that says there has been additional cost.
BYNER:
Now as a result of this somewhat mess up, are you emboldened to even consider voting online?
TREASURER:
That proposition hasn’t been put to me.
BYNER:
No.
TREASURER:
I will leave that to the Special Minister of State to deal with those. Look I think and I have to go back on the history on this if you can indulge me Leon. The decision to actually go to an e-census – so to go from one third of people filling it online to two-thirds filling it out online was made in 2011, made by the statistician under the previous government. In the 2013/14 Budget the then Gillard Government made a provision in the Budget for these contracts and it was some $60-odd million to go and put the additional preparations in place to do this. Now we honoured all of that and indeed for the ABS more broadly in our first Budget we provided an extra $250-odd million for the ABS systems generally, extra to the census. So on all the other things they do because that had been neglected previously. So they received the funding they needed, there were capability assessments that were undertaken, there were stress tests that were done. There was no request for any resources that was made to my knowledge or to the Assistant Minister who preceded the current Minister who was my Assistant Minister, Alex Hawke. He was asking these questions and getting those assurances during his time. So Ministers along the way from the best of what we are able to tell at this stage, going back to the previous government under Labor, so I am making no accusations against Labor, if anything I am actually saying they were making right decisions then. Those decisions were being implemented properly. But there was a failing on that night by what was supposed to and had been assured to us would be delivered.
BYNER:
Treasurer thank you for joining us today and clarifying some of these matters.
TREASURER:
Thanks Leon, always good to chat.