Tony Zappia (Makin, Australian Labor Party) Share this | Hansard source

I continue my remarks in respect of the Foreign Acquisitions and Takeovers Amendment Bill 2009. At the time the debate was interrupted earlier, I was referring to the fact that the amendments are designed to capture foreign investments that have the potential to provide substantial influence or control over an Australian company either now or into the future. The bill clarifies the operation of the act by explicitly requiring foreign investors to notify the Treasurer where there is a possibility that the type of investment arrangement being used will deliver influence or control over an Australian company.

The Foreign Acquisitions and Takeovers Act 1975 provides the basis for the Treasurer to examine proposed foreign investments in Australian businesses and assets to ensure they are not contrary to the national interest. This bill amends the act to reflect the growing use of more complex investment structures, particularly instruments such as convertible notes, which will now be treated as equity for the purposes of the act. The bill will clarify the operation of the foreign investment screening regime and will ensure the act applies equally to all foreign investments, irrespective of how they are structured. The changes to the act under this bill will apply retrospectively from the date of the Treasurer’s announcement on 12 February 2009. Although this bill clarifies the operation of the act, it does not pre-empt any final decision by the Treasurer on any current or future investment proposals. Applications to the Foreign Investment Review Board will continue to be examined on a case-by-case basis against the national interest.

Foreign ownership of resources, industry and commercial operations in Australia continues to be a polarising subject amongst the Australian people. On one hand, foreign investment has over the years enabled Australia to expand its economic base and in turn create jobs and boost productivity and export income. The counter view is that foreign ownership of Australian assets places Australia at the mercy of overseas countries and overseas boardrooms, who have little empathy for the local community or Australia’s national interest but are instead driven solely by their profit and loss statements.

This becomes even more of a concern when the foreign investment results in a monopoly or unfair market power over the sector, leaving Australian consumers vulnerable. It therefore becomes a balance between ensuring foreign investment that benefits the nation is encouraged, ensuring that Australia’s national interest is preserved and ensuring that Australia’s international investment and trade obligations are met. The recent global economic recession has highlighted the risks Australia can be exposed to when we are too reliant on the global economy and on foreign investment.

In South Australia these risks were clearly exposed with the global downturn in the auto industry and the impacts that downturn had on GMH operations at Elizabeth and the Bridgestone tyre manufacturing plant at Salisbury. Whilst the GMH operations at Elizabeth have survived the rationalisation of GM’s global operations, the Salisbury Bridgestone plant did not survive. The plant is set to close sometime in April of 2010 with the loss of around 600 jobs. Further job losses are likely to occur at other local businesses that have been highly dependent on the Bridgestone plant for the past 45 years. I understand that another 275 jobs will be lost in Christchurch in New Zealand with the closure of that plant by the end of this year.

Salisbury is one of Bridgestone’s many plants around the world. Bridgestone was founded in 1931 and today operates 190 manufacturing plants worldwide in some 26 countries. Of those plants, 76 are tyre related. Production at the Salisbury plant commenced in 1964 under the Uniroyal brand. In 1980 Uniroyal was bought out by Bridgestone and the Salisbury plant became the Bridgestone plant. Bridgestone’s retail operations will continue in Australia, with all tyres sold in future being manufactured in one of their overseas plants and imported into Australia. There has been no evidence that the Australian Salisbury plant was not independently viable or that it could not have survived the global recession. The reality is that decisions about its future were made by a boardroom in Tokyo with the decision most likely based on Bridgestone’s corporate international best interests and not because of Australia’s best interests. I note that the Bridgestone Corporation recently announced the building of a new retread material plant in Thailand and an increase in production of a tyre production plant in China. On the one hand we have the Salisbury plant being closed and on the other hand we have an expansion of operations in Thailand and China.

The closure of the Bridgestone plant also raises another concern. I understand that with the closure of South Pacific Tyres, who were the manufacturers of Dunlop and Goodyear tyres in Australia, we no longer in this country have a major tyre manufacturing operation of any kind.

About three weeks ago the member for Wakefield, who I notice is in the chamber here today and whose electorate the Bridgestone plant is within, the member for Port Adelaide and I had meetings at the Bridgestone tyre factory at Salisbury. Along with the Minister for Employment Participation, Senator the Hon. Mark Arbib, we had discussions with the management of Bridgestone to secure the ongoing rights and entitlements of the workers. I am pleased to see that the management is working with the South Australian government, with the federal government and with union representatives to ensure that the rightful termination payments and the necessary support are given to the 600 employees of that plant as they transition to new employment.

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