Quite what new Treasurer Joe Hockey thinks about the proposed takeover of GrainCorp by US giant Archer Daniels Midland has been the subject of speculation for quite some time. Now we’re working with live ammo and the commentators are expanding the conversation to include Trade Minister Andrew Robb, who has a long history with agricultural policy and foreign investment — the places where the Coalition is at its most vulnerable.
Fairfax’s Elizabeth Knight writes that all the focus is on Hockey and Robb to set the line for foreign investment, with Archer Daniels Midland’s offer for GrainCorp.
“Needless to say the business community is viewing this deal as a test case and is pushing the liberal stance on investment. It will be a particularly interesting insight into how the Liberal Party will balance its top-priority international trade and investment agenda with the need to retain peace with legislative partner the Nationals. The balancing act is looming as a headache for Trade Minister Andrew Robb. While the GrainCorp bid will exercise the minds of the business community in the short term, the larger national issue is the all-important relationship between Australia and China.”
The Australian’s Asia Pacific editor Rowan Callick has some great history on Robb and the history of the frustrations within the Coalition over foreign investment.
“Andrew Robb has undertaken some tough tasks. But now he's been set an especially challenging mission: to re-energise Australia's economic engagement with Asia. He is the first Liberal Trade Minister since Neil O'Sullivan, who served from 1949-56, when he was replaced by the Country Party's ‘Black Jack’ McEwen. Prime Minister Tony Abbott has deployed him there because of his ‘small l’ liberal economic credentials, and his strong links with business. Despite the upbeat rhetoric surrounding last year's well-intentioned Asia white paper, we've been treading water at best.”
Similarly, The Australian’s economics editor David Uren is a tremendous student of history, picking Nationals headliner Barnaby Joyce as the prism to view the Nationals-Liberals tensions.
“Although Joyce made it clear he coveted the trade portfolio held by the Nationals in Coalition governments since McEwen won it in the mid-50s, Tony Abbott made the right choice in opting for Robb. There is no holding back the tide of global competition and if the Chinese or Kazakhs can produce vegetables or wheat more cheaply than we can, then we should be doing something different. Encouraging more foreign capital into the farm sector and forging trade agreements to open markets is the best hope for the future. As the new Prime Minister said when unveiling his ministry, ‘One thing we can't do is build walls against the world. If we build walls against the world, the world may very well build walls against us.’ Yet the tension within the Coalition over foreign investment remains. Truss hit a discordant note at the Coalition policy launch, attacking the foreign purchase of agricultural land and highlighting Coalition plans to crack down.”
There’s another big regulatory decision set to land in the immediate future, by which, we mean today. The Australian Financial Review’s Chanticleer columnist Tony Boyd reports on the Australian Competition and Consumer Commission’s (ACCC) decision on Perpetual’s bid for The Trust Company.
The pair are both on the recent bubbling concerns about a property bubble in Australia and the calls for certain regulatory responses. If you read their pieces, which are thematically similar, you’ll be an authority on the subject.
And finally, The Australian’s widely respected resources commentator Barry Fitzgerald runs us through the expectations amongst analysts for the speed with which Fortescue Metals Group will pay down its debt.