Home' Policy Magazine : Policy Vol 31 - No 3 Contents BOOK REVIEWS
48 POLICY • Vol. 31 No. 2 • Winter 2015
The book is organised by issue (eg mining, cars,
agriculture and national security) rather than by
date, meaning the same time period is discussed in
multiple chapters. That said, organising the book
chronologically would mean the converse problem: the
same issue would be discussed in multiple chapters.
Takeover usefully relates the foreign investment
debate to the distinct but related issue of import
protection. For example, it is interesting to read in
Takeover that protectionism co-existed with open
stance on foreign investment for about 70 years from
federation, and in fact foreign investment in some
Australian car plants was dependent on the import
protection provided to those manufacturers.
Takeover puts current debates in an informative
historical context, as concerns over foreign
investment are hardly new. Uren informs us that
these concerns grew during the 1960s, with a number
of ad-hoc decisions made to restrict particular
transactions. There were a number of twists and
turns in policy, with Prime Minister Gorton taking
a more restrictive view than his predecessor (Holt)
or successor (McMahon). Despite McMahon’s
dislike for investment controls, Takeover informs
us that he was forced to concede defeat in the
debate, and he announced the start of a more
comprehensive foreign investment review process.
Arguments against foreign investment have been
furnished by both the left and (conservative) right.
The left complains because it dislikes capital,
multinational corporations and tax avoidance;
the right complains about the loss of sovereignty
and control. The left-right alignment makes for
an odd couple. Uren notes that this alliance is pretty
unusual, although there are other issues of right-left
agreement, such as coal seam gas and immigration.
The common ground between right and left
is most evident with the National Party and the
Greens somewhat awkwardly agreeing with
restrictions on foreign investment in rural land.
Cutting overall investment in farming probably
seems like a good idea to the Greens, so their
stance is understandable; less understandable is
the position of the National Party. The Nationals
may argue that more scrutiny of foreign investment
won’t lead to reduced investment: but if that is
true, then why do the scrutiny at all? The only reason
to regulate more transactions is if there is at least
the possibility of investments being knocked back.
The peculiarities of public concerns don’t end
there. According to Takeover, a 2014 survey by
the Lowy Institute3 found the public thought that
foreign investment is a greater threat to Australia
than the emergence of China or conflict in Korea.
The public is even explicitly contradictory in a 2012
Lowy Poll cited in Takeover: 46% thought the
government was allowing too much foreign
investment; while 60% believed the government
should be doing more to foster Asian investment in
Australia. At least 6% of those surveyed, and probably
more, held these two inconsistent positions at
the same time.
More generally, Australians believe that they can
oppose particular instances of foreign investment
and this won’t have any effect on total levels
of investment. If foreign investment is blocked,
then investment funds will magically appear from
somewhere else. Newsflash: it won’t. Foreign
investment is needed so that businesses can
make the most of growth opportunities. Takeover
mentions several examples, including a study by
ANZ showing that $600 billion in investment is
needed in agriculture to double exports to Asia
over the next 40 years. Uren notes that Australia
needs foreigners to invest, not because we don’t
save enough — instead it is because we have so
many good investment opportunities.
It might have been thought in the 1970s that
the introduction of the investment review process
would reduce the amount of debate on the issue.
No such luck. If anything, debate intensified,
perhaps because politicians now had the review
process, a ready made tool to restrict or prevent
unwanted investment. Unsurprisingly, it has
created lobbying and calls for the government to
‘do something’. Takeover charts a few prominent
and controversial cases, including the decisions of
successive governments to block Shell’s takeover
of Woodside Petroleum in 2001; block the
acquisition of the ASX by the Singapore Exchange
in 2011; and block the purchase of Graincorp
by Archer Daniels Midland (ADM) in 2013.
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