Speeches & Transcripts
GrainCorp - Tamworth
29 November 2013
Well thank you very much ladies and gentleman for being here in Tamworth today. I think it is only pertinent that a decision like this be made when the Agriculture Minister has the opportunity to reply to it from Tamworth – a large grain producing area and New England a large grain producing electorate. It’s timely.
I am very welcoming of the Treasurer’s decision. I understand the difficulty that the Treasurer would have had weighing up all the options that involved this position.
I believe it is firmly in the national interest to make sure that one of Australia’s greatest agricultural assets, GrainCorp, remains as predominantly Australian owned. It is so important because in the next 50 years we all know that the world will consume, the human population will consume, more food than it’s consumed in its history. Now, if we in Australia are to be a benefactor of this then what we have to do is to make sure that we have the capacity and the levers at our disposal so that we see this flow back to the farmgate.
With ADM the problems that we would have had is that the person who purchased the grain would have been the storer of the grain, would have been the mover of the grain, would have owned the port facility, would have owned the shipping slot and in many instances would have been the end user of the grain. More importantly than that, they didn’t need Australian grain for their business plan it would have only been about 4 per cent of their total turnover.
So this means that when the time suited them they’d have the capacity to work at the exclusion of the Australian grain grower to benefit the position of ADM – and that’s a natural enough business process that’s what businesses do.
But we’ve got to make sure that Australia’s future is one where we might not be a military superpower, we won’t necessarily be a superpower in other areas, but we will be a major Asian food power.
And so I, as the Agricultural Minister, I’m very appreciative of the fact that it is in our national interest that we grow GrainCorp to be part of that process. And I believe like GrainCorp had a marvellous, a marvellous, history to take them to this position. And you only need read their 2012 annual report to understand that – that they have a marvellous future as well.
I was very encouraged when I read the 2012 GrainCorp annual report to see all the boxes that they have ticked and how they have got so far and this was before the advent of ADM and I’m sure that process will continue on because I believe that what they wrote in their 2012 annual report is true to today.
Q: Were you surprised by the announcement by Joe Hockey?
A: I was waiting for the announcement and I honestly did not know which way he would go and that is natural enough, because if I really did have knowledge beforehand I would have the capacity to go into the marketplace and make a lot of money out of the shares, I suspect. I know which way I wanted it to go and I know which way my constituents wanted the decision to go not exclusively – there are always people who are either ambivalent or who were in support of it – but overwhelmingly people wanted this rejected. And in the end they wanted it rejected not only in regional areas but in polls that were had in urban areas as well. So, I’m happy now that that outcome has come about.
Q: Did you think Joe Hockey would disallow all together rather than approve with conditions?
A: Ah well, I think it is dangerous when you start approving with conditions because you’ll get one person with a disadvantage to other people in the market place. I want GrainCorp to be a strong entity. I want GrainCorp to be a strong company – but I want it to be an Australian company.
Q: this has been a point of conflict between the Liberals and the Nationals – what does this say about the relationship within the Coalition?
A: I’m happy that in this business relationship called the Coalition that both parties treat each other with respect, that both parties understand the views of the other party, and we understand, you know, that this is not just a National Party issue. I know that is how it will be played. But there are many Country Liberals who had exactly the same views. Whether it was Bill Heffernan, or Sharman Stone, or Sussan Ley or Russell Broadbent – there were a whole range of Liberals from country or semi country areas, or peri urban areas who said we have concerns about this as well. And there are alot of people on market concentration issues said look ‘we’ve got real concerns about this’. Then ultimately we had that vast political group which is so powerful in Australia – and it’s not the National Party and it’s not the Liberal Party – it’s called the Australia people. And when the Australian people started saying in poll after poll ‘we don’t support this sale’ then they are the ultimate boss politically. They are the ultimate person we have to listen– that is the voting public.
Q: [inaudible] and what message does this send to other companies that want to invest in Australia?
A: What we’ve seen is in excess of 130 Foreign Investment Review Board decisions and only one rejected under this current government. That’s less than one per cent have been rejected. Now I think if you were getting better than ninety-nine per cent success rate you should be pretty happy with that. To be honest, I think it would be rather peculiar if you never rejected anything.
Q: Have the Nationals and growers shot themselves in the foot given that no one else would have made kind of infrastructure investment, you know $200 million dollars, that ADM was promising?
A: Well I must say I am very sceptical about the $200 million dollars, at the final stage of this deal. I mean if it was so important, if they had done such a close analysis, why didn’t they offer that at the start? Really it was just a sweetener at the end to try to push something across the line. And what I would say is that all the infrastructure that is there now, whether it’s the receival sites, whether it’s the slots, whether it’s the ports, whether it’s the market share, whether it’s the massive growth in GrainCorp that we’ve seen – that’s all happened without ADM. And I am certain, with good management, it will continue to grow. I want GrainCorp to be a strong company. This is not about GrainCorp. I am proud of GrainCorp as a strong Australian company. I want it to grow and I understand what ADM tried to do. ADM are there for commercial reasons and good luck to them – that’s how a strong commercial organisation like ADM works. But we have got to look after the Australian people. And we’ll stand up for the Australian people, the Australian grain grower and we will listen to the voters and what they request of their government.
Q: given you want GrainCorp to remain in Australian hands will your government commit to $200 million dollars worth of freight rail infrastructure now?
A: Well, all the infrastructure, the vast majority of infrastructure, that’s sitting there has been supported by tax payer in so many instances. We will continue – and I will show you a classic example right now – in the forward estimates the Minister for Infrastructure, Warren Truss, has put up $300 million dollars for the construction of the inland rail. This will give the capacity for inter-nodal port access between Brisbane, down to Melbourne, including Sydney, ultimately we hope to connect to Gladstone and across to Adelaide. That’s real investment. That’s real infrastructure investment into the future of our nation which will assist the movement of grain and the movement of other products. And that shows that our nation will invest in infrastructure regardless of whether ADM makes an offer or not.
Q: Joe Hockey has cleared the way for ADM to buy 24.9 per cent of share holdings your comment on that?
A: I think that this is, will test the mettle of ADM, and we’ll see what ADM intends to do. I’m just happy that in representing the constituents that clearly said that they wanted this deal blocked, who came into this office in Tamworth and offices across our nation, who have overwhelmingly been of the view, through their peak industry bodies at state level in Queensland, in Victoria and in NSW – they’ve all said the same thing. They had massive concerns about this. It was not just the concern of the National Party, it was not just the concern of Country Liberal Party members, it was the concern of so many people involved in the industry and I’m happy those concerns have been listened to.
Q: How did you find out the news?
A: Well, um, to be honest, I heard that Alison Watkins had pulled out of an interview on Radio National and I knew that something was on. And that’s what you’d expect because the decision of the Treasurer is very market sensitive and you don’t get people ringing you around and saying ‘this is what we’re going to do’ because if it ever leaked people would take short term options on the position of the marketplace and turn themselves into a millionaire in, you know, 10 minutes and you don’t want to do that. The Treasurer handled this very professionally. He never once gave an indication of which way this was going to fall. We were in contact with him – and that’s the way it’s supposed to work.
Q: did you fist pump the air?
A: Ahh, um, possibly.
Q: But you do see it as a win for the Nationals – you have been called a bit of a toothless tiger of late. This give you a bit more teeth?
A: Look, I’ll leave that for the commentators but I look back through the history of my involvement in the National Party, the Chinalco Rio bid, when Alco tried to take over Qantas and now we’ve had ADM try to take over GrainCorp – the stopping the ETS and ultimately stopping the carbon tax – it always amazes me when people say they’re the actions of a toothless tiger. I’d hate to see what the tiger looked like if it had teeth.