Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

I move:

That this House:

(1)

resolves that it will oppose any sale of the Australian Securities Exchange that would provide majority foreign ownership; and

(2)

notes that such a sale would not merely involve the ASX as an asset, but may hand over to a foreign corporation the regulatory function inherent in a stock exchange.

In moving this motion, I recall sitting in this place while I watched the six great mining companies of Australia—many of my forebears had gone down their mines and had done various other things to contribute to the growth of those companies—sold off to foreign ownership. We have for the first time in probably 30 or 40 years a trading surplus in this country, but of course the balance of payments is skyrocketing out of control. I cannot help but mention Mr Keating. When the balance of payments was $15 billion, he said, ‘We’re in danger of becoming a banana republic.’ When it hit $23 billion, the Leader of the Opposition at the time, John Howard, reminded him of the statement and said, ‘It was the overwhelming problem above all else.’ It is now $60 billion, not $15 billion—‘a banana republic’; and not $23 billion—‘the overwhelming problem above all else’. I am only a humble Cloncurry boy and a simple backbencher in the parliament of Australia, so I do not know about these things. But these two men had held the offices of Treasurer and Prime Minister of this country, and so if anyone should have known about the serious nature of the balance of payments it should have been them, yet the six great mining companies of Australia were flogged off to overseas ownership and now the great profits that come into Australia from coalmining, aluminium and iron ore simply boomerang back out again. So whilst Australia has a trade surplus its balance of payments—some five or six per cent of our GDP—is one of the worst in the entire world.

Members in this parliament stood here and agreed to the sale of these great mining companies—Western Mining Corporation, BHP, North, Normandy and MIM, which was in my own backyard. Since the deregulation of the dairy industry in 2000, we have watched over its sale. The five corporations that account for about 80 or 90 per cent of our dairy processing are now foreign owned. Like the mining companies, they were all Australian owned some 15 years ago. Also, 40 per cent of our meatworks has gone overseas. AMH, as you are well aware, was Australian owned and accounted for most of the processing of meat in this country. Golden Circle and IXL are the great processing giants of Australian fruits and vegetables. Our horticultural industries have vanished under foreign ownership. The AWB, arguably the biggest corporation in this country, is in the process of being flogged off overseas, as is two-thirds of our sugar industry. Every one of these things was Australian owned. Now every single one of them—the great juggernauts of Australian industry—is foreign owned.

We are here tonight not to discuss the sale of chook farms or factories or any of the other tangible assets which I have referred to but to discuss another sale—and this is a qualitative change. Mr Deputy Speaker, I would like to be able to speak to you without listening to other people—

Joe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | Link to this | Hansard source

I’m trying to find a seconder.

Bob Katter (Kennedy, Independent) Share this | Link to this | Hansard source

Righto. Thank you for that. What we are now referring to is a qualitative change. It is not like the sale of a chook farm or a factory; this is the sale of a regulatory mechanism that facilitates the proper functioning of the share market. People need to be able to buy and sell shares, confident in the knowledge that they are protected from manipulation. If the sale of the Australian Stock Exchange proceeds, it will be in the hands of a foreign corporation that is substantially owned by a foreign government. So we will have a foreign government owning a sovereign power of the Australian people. I will not go into the details of the takeover bid for Coles by certain people on the board of Coles, but effectively these people lent an XYZ company money from Coles. This company then bought shares in Coles so that a certain person, who was a supplier of many items to Coles, could become chairman of the board of Coles and control it. That is the sort of thing that needs to be looked at by a stock exchange. If that company were, for example, a Singapore based company, one would think that certain prejudices would run in favour of the Singapore based company at the expense of Australian shareholders.

I am well aware of the tightly held nature of companies where shares are held by very few people. They can very easily manipulate the price up by a little bit of buying on the market or manipulate the price down if it suits them so they can buy more shares and more control of the company. We have a stock exchange not only to facilitate the buying and selling of shares but also to regulate it and see that it does not become an instrument of manipulation and deceit. That is why this is different from selling a chook farm or selling a factory. This is a case of selling a very important asset of this country, a sovereign mechanism. This is more in the nature of selling the arbitration commission. It mean seem that I am reaching a long way if I say selling the High Court, but this is a regulatory mechanism that is part of the sovereign powers of the Australian people.

All right, you want to sell the railways. I am diametrically opposed to the sale of that great asset, the railways in Queensland. But if you are going to do that, that is qualitatively entirely different to selling a regulatory mechanism, what we are discussing here today. Those in this place sat on their hands and did nothing while the great mining companies of Australia were flogged off to foreigners, and now all those great profits are sailing out of this country. To me, trying to impose a tax upon the miners is well and truly attempting to shut the gate after the horse has long ago bolted. I remember the great Vince Gauci at MIM pleading with the board not to sell Mount Isa Mines. I think every single year for the first four years after the sale the company made more profit in each year than the stupid board members had sold the company for. It was similar with dairy factories, meatworks, horticultural processing, Golden Circle, IXL, the Australian Wheat Board—great institutions set up by the Australian people.

I remind the House before I conclude that Ben Chifley always claimed that it was the ALP that regulated and introduced the AWB, the single-desk seller in the wheat industry. That was technically correct. Jack McEwen always violently altercated with him and claimed it was the Country Party that had been formed for the purposes of achieving a single-desk seller in the wheat industry. That was why the Country Party was actually formed. But they always fought. They had substantial arguments.

Today we see people vying for the privilege of flogging off the assets of Australia and even our regulatory mechanisms. In this place we must tenaciously oppose the sale of regulatory mechanisms. Even if you agree to the sale of Australia’s assets—which I do not—you cannot agree to the sale of a regulatory mechanism that is being proposed—that is if it is being proposed—in this place. I hope that it most certainly is not.

In conclusion, we had a joke when I was a young person about the sort of bloke that would sell you the Sydney Harbour Bridge. The only thing that surprises Australians today is that we have not sold the Sydney Harbour Bridge, but don’t hold your breath. I take great pleasure in having moved this resolution.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Andrew Leigh (Fraser, Australian Labor Party) Share this | Link to this | Hansard source

Australia has a strict and comprehensive regulatory process in place to ensure that decisions on proposals like this are always taken in our national interest. The government also has a strong commitment to build Australia as a finance centre and a regional hub for financial services. Of course, this means preserving the market integrity of the ASX and continuing to boost Australia’s reputation as one of the most attractive investment destinations in the world.

A proposal of this type is subject to extensive regulatory consideration under both Australia’s foreign investment policy and the Corporations Act. Australia applies a rigorous national interest test to all proposals for foreign government investment and significant foreign private investment. This particularly applies to a transaction of this scale and importance. The screening process to consider the proposal will be undertaken by the Foreign Investment Review Board in the normal way. FIRB will seek advice from other government agencies, including ASIC and the Reserve Bank, on whether the proposal is contrary to the national interest. The government always has taken—and always will take—these decisions in Australia’s national interest. This is the overriding consideration for foreign investment proposals.

As members may be aware, on 1 August 2010 the government transferred supervision of Australia’s financial markets to ASIC. These reforms will enhance the integrity of Australia’s financial markets and help promote Australia as a financial services hub in our region. Australia’s financial regulators put their world-class reputation beyond doubt during the crisis. Our financial system came through with flying colours. Australia’s financial system has performed better than any other during the global financial crisis and these reforms will ensure that Australia’s regulatory arrangements remain among the best in the world. The ASX is an important part of financial system’s architecture. The government will continue to consider all transactions with an objective of carefully and methodically building Australia’s reputation as a financial services hub in the national interest.

Australia’s foreign investment framework is longstanding and reflects strong bipartisan support over a number of decades. It balances the need to ensure Australia’s economy can benefit from foreign investment with the need to ensure that investment is in the national interest. The government examines all foreign government investment proposals and significant private investment proposals on a case-by-case basis to ensure they are in the national interest. This means assessing the impact on the economy, the community, national security and revenue.

But federal Labor has also made important improvements to the foreign investment framework. We released national interest principles to improve transparency around how the national interest test is applied. In June of this year we released the easy-to-read version of the policy to further improve transparency of the regime. Our approach maximises investment flows, grows regional communities and creates job opportunities right across Australia, while protecting our national interests.

In conclusion, I draw the House’s attention to the findings of the Johnson report earlier this year, which noted that economic research demonstrates a well-established causal link between financial sector development and economic growth. Having an open, efficient, well-regulated and competitive financial sector is thus in the interests of all Australians.