Rex Patrick (SA, Independent) Share this | Link to this | Hansard source

Just on a year ago I embarked on a series of speeches in the Senate that aimed to put the spotlight on Australian businesspeople who, in various ways, have had an impact on Australian society, economics and politics. The person I wish to speak about today has had a prominent career; however, outside Australia's political, business and academic elites, he is little known to most people. Dr Geoff Raby is an Australian economist, former diplomat and business adviser. He has been seen as one of Australia's best and brightest, and has enjoyed a stellar career.

Dr Raby is a graduate of La Trobe University, with bachelor's and master's degrees and a PhD in economics. He joined the Department of Foreign Affairs and Trade in the 1980s. He rose rapidly through the ranks: he worked at Australia's embassy in Beijing, served as head of DFAT's North-East Asia analytical unit and led the trade negotiation division, before becoming our ambassador to the World Trade Organization. Dr Raby then headed up DFAT's international organisations division and served as ambassador to the APEC forum, before being a DFAT deputy secretary from 2002 to 2006. This impressive diplomatic career was capped when Dr Raby served as Australia's ambassador to China from 2007 to 2011. At that time, as Raby has described it:

We enjoyed almost unrivalled access to the top Chinese leadership. High-level visits were frequent, and engagement was expanding exponentially on every front.

Dr Raby was tipped as a future DFAT secretary, but those ambitions were not fulfilled. Instead, on completion of his ambassadorial term, he abruptly resigned from the diplomatic service and established Geoff Raby & Associates, a Beijing-based business advisory firm. There were some who questioned the propriety of an ambassador walking out of his office and immediately setting up a lobby shop in the capital where he had just represented this country. Undoubtedly the lure of the lucrative Chinese market was very strong. Geoff Raby & Associates appear to have enjoyed some success in the boom times of the Australia-China relationship.

In the 2019 Queen's Birthday Honours, Dr Raby was appointed an Officer of the Order of Australia:

For distinguished service to Australia-China relations through senior diplomatic roles, and to multilateral trade policy development.

Dr Raby has been a frequent contributor to public debate on foreign policy, especially Australia-China relations. He has long been a leading advocate for deeper economic ties between Australia and China, and for Australia to accommodate and adapt to China's rising power and influence. As tension between Beijing and Canberra has grown, he has been increasingly critical of Australian government policy and those who are concerned about China's regional ambitions, Chinese espionage, and Chinese political interference and human rights abuses. As early as May 2018, Raby penned an opinion piece claiming that Australia's relations with China could improve only through the sacking of then then foreign minister, Julie Bishop.

In October 2019 Dr Raby delivered the annual La Trobe University China Oration. In speaking of what he called 'the China threat', he asserted:

The China Threat is much exaggerated, both as a military adversary and as a challenge to Australia’s domestic institutions.

Dr Raby has elaborated his views in a book in which he makes a sharp critique of Australian policy towards China and offers what he claims to be a realistic but relatively benign view of China's ambitions and capabilities. Dr Raby believes that Australia won't be taken seriously if we can't manage relations with Beijing, that we're too close to the US, and that we should avoid too sharp a criticism of the Chinese Communist regime and its human rights abuses.

Dr Raby is free to express his views. We need open and diverse debate on our relations with China, something that will be our most difficult international challenge for years to come. That said, it should be noted that Dr Raby's views have often been quoted by the ultranationalistic propaganda mouthpiece of the Chinese Communist regime, with the likes of the Global Times welcoming his critiques of Australian policy. Albeit selectively, they like what he has to say.

Moreover, it's worth highlighting the business context of Dr Raby's contribution to foreign policy debate. Geoff Raby & Associates was deregistered in 2016. Much of his business activity now appears to be focused on directorships in enterprises that include Legend Media Group, a Chinese focused entertainment and media company, and OceanaGold, a multinational goldmining company. Most significantly, since June 2012 Raby has served as a director of Yancoal, the big Chinese owned coal producer that operates mines across Australia. Yancoal Australia is indeed Australia's largest pure coal producer. It's a highly profitable company that operates and manages mines across New South Wales, Queensland and Western Australia.

The largest shareholders in Yancoal are Shandong based Yanzhou Coal, with a 62 per cent holding, and Cinda International, a Hong Kong based investment company, with 16 per cent. Yanzhou Coal is now owned by the Yankuang Group, the fourth largest coalmining state owned enterprise in China. Yancoal is thus majority owned by the Chinese state. Yancoal's board includes five Chinese directors, including chairman Baocai Zhang, who also represents the Yankuang Group, and one other Chinese director who represents Cinda International. There are three Australian directors, Greg Fletcher, a former senior partner with Deloitte, Helen Gillies, a legal and risk management expert, and Dr Raby.

In March 2019, Dr Raby appropriately registered with the Australian government's foreign influence transparency register regarding his position as director of Yancoal. Dr Raby worked with Yancoal for nearly nine years. That's significant because in that time Yancoal emerged as one of Australia's top corporate income tax dodgers. The extent of Yancoal's aggressive tax minimisation is made clear by the Australian tax office's corporate income tax transparency reports. Between 2013-14 and 2018-19 Yancoal generated $16.6 billion in revenue. Remarkably, they declared just $26 million in income tax. That's on taxable income. Over those six years of activity, as the coal price skyrocketed, Yancoal paid no corporate income tax at all—not a cent.

Just how Yancoal manages this is a complex story, but, as investigative journalist Michael West has shown, it's in line with the aggressive tax minimisation practices employed by many foreign mining and energy companies operating across Australia. There's the so-called Singapore hub corporate structure, with hundreds of millions of dollars of payments to related parties. As of 2017-18, there's been $1.5 billion in loans from associated companies at rates of up to seven per cent and some $200 million in other corporate costs paid to associates. Yancoal has had $1.3 billion banked in tax losses to offset against future profits. It is also noteworthy that, as the recent reports by the Centre for Public Integrity showed, over the past 20 years Yancoal has shelled out over $2 million in political donation in spite of a published code that says it's against company policy to use corporate funds for political purposes. That's right: no corporate income tax is paid, but there are plenty of dollars to buy political influence. This is essentially a colonial-style mining operation, a foreign owned and controlled enterprise stripping out wealth while paying back an absolute minimum, if anything, to the community.

Geoff Raby knows quite a bit about this sort of operation. He once wrote a book on Australia's colonial economic history. In the latter part of his career, he's embraced a new colonial relationship, where a Chinese owned state enterprise makes handsome profits and feeds China's industrial expansion while paying not a cent in corporate income tax in Australia. Dr Raby has properly registered as a foreign agent, but in doing so he should have described himself as what he is—just a frontman, a paid operative selling his influence and credibility to foreign corporate tax dodgers. It's a sad postscript to a distinguished career and it's the context in which Dr Raby's commentary on our relationship with China should be viewed. Perhaps the next time an Australian university or think tank contemplates inviting Dr Raby to give an address, rather than asking for his views on high diplomacy they might ask him to justify his involvement in one of Australia's biggest corporate tax dodges.