The Treasurer Joe Hockey’s claim that he blocked Archer Daniels Midland’s proposed takeover of GrainCorp because the American company was “not of particularly good character” shows the Abbott Government is making up investment policy on the run.
Mr Hockey’s extraordinary claim – made public five months after blocking the ADM investment – raises serious questions about the transparency and fairness of the Government’s approach to foreign investment.
This sorry saga of confusion and contradiction on ADM’s proposed $3.4 billion investment gives the lie to the Government’s claims that Australia is open for business.
The Treasurer and the Minister for Trade and Investment Andrew Robb have made a series of inconsistent statements about ADM’s proposed acquisition of GrainCorp.
When Mr Hockey announced he was blocking the deal last November, he cited national interest grounds and the impact on competition, and made no mention of character grounds.
Then in March this year, Mr Robb told an investor conference the decision to block the takeover was just a signal that the deal’s timing was wrong and that “there may be an opportunity at some stage” for ADM to renew its bid for GrainCorp.
Yet now we have the Treasurer claiming that one of the reasons for his decision was concern about the company’s character.
This raises questions about whether Mr Hockey provided ADM with an opportunity to respond to these concerns and why he did not mention them in his statement of reasons for blocking the takeover.
It also raises the question of why the Investment Minister has been encouraging investors in ADM by saying the takeover might be given favourable consideration in the future.
As the Business Council of Australia’s chief executive Jennifer Westacott said at the time of the ADM decision, certainty about Australia’s foreign investment policy and transparency in communicating reasons for decisions are important for global confidence in Australia.
Capricious, inconsistent and incoherent behaviour like this by the Abbott Government on a major investment proposal will erode Australia’s reputation as an investment destination, which will be bad news for jobs and growth.