COMMENT by AUSBuy CEO Lynne Wilkinson

IT HAS BEEN a revelation to see the vitriol heaped on Mr Hockey’s decision to stop the sale of Graincorp to ADM (USA), because it has shown that many “observers” in the media have failed to see the exquisite subtlety of the decision and the limitations of their fixed views.

There is little doubt that the Abbott Government has inherited a mess, much of which has been exacerbated since 2007.

Only policies which meet Australia’s “national interest” will get Australian assets and our people working for Australia again, revitalise our economy, and reduce our debt so we can take advantage of the opportunities the Asian century is supposed to promise.

We can only hope that the “intent” of this decision is replicated as we see off-shore bidding for other strategic assets in the food sector.

If ADM owned the assets, then there is no guarantee the farmers would be able to access or use the infrastructure for any other buyer other than ADM.

The majority of our grain exports are still controlled by foreign interests beyond the farm gate. Graincorp and CBH (WA) represent less than 50% of our grain exports. Hardly a duopoly!

Foreign owned Glencore, Dreyfus, among others own our grain exports, and the family owned US company Cargill owns many of our beef and grain exports.

Cargill has not reinvested in grain infrastructure. They use existing infrastructure. So much for successive Governments’ waivers to foreign take over that they will build infrastructure and invest here.

The problem is further exacerbated by our tax laws which favour foreign interests with only 10% withholding tax on declared profits, after they have been siphoned off shore.

Mr Hockey may have found some unexpected “reds” in the bank accounts, and these are just some of the issues which rob is of reinvestment here. Food for thought in the commission of audit.

Mr Hockey has effectively told the Graincorp board to do better than they have done and reinvest in the business.

As they say “if you can’t change the people you change the people”. It seems it is all too easy for Boards to think short term, especially when there is no shortage of keen buyers.

Graincorp was once owned by the farmers. It is now owned largely by institutions who will still look for quick returns to their shareholders, but it also means Australian can invest in the company for the long term if it is controlled here.

The problem is when Australian exports are sold by foreign interests we are no longer control our reputation or the supply chain. Our products are not differentiated in the market place. Our farmers become price takers, not price makers.

It is human nature, supported by their policies, that other countries give priority to their own. This does not make sense in a world hungry to secure its food.

Generations of our farmers have built Australia’s reputation as among the best in the world for quality and productivity, decades of falling income and rising debt has been ignored.

Now Mr Hockey has given the east coast grain growers the assurance that they have some control over their future.

There are lessons to be learned from this. Governments keep talking about Australian businesses being productive and competitive, yet Australia has a handful of businesses competing with countries that have dozens if not hundreds of businesses in particular sectors, and who subsidise their growers.

In the meantime our processors and manufacturers languish, or if foreign owned here have a habit of threatening to leave or do move off shore to source elsewhere and sell back to us.

He has also defined his Party’s “open for business” policy by saying to ADM you can buy up to 24.9%, but cannot control the assets, the profits, decisions.

This new kind of “open for business” means we are not desperate sellers and deal with us on our terms. Just as every other country does that controls and grows it wealth creating assets.

We do hope Mr Robb is listening as he is rushing to sign Free Trade Agreements with China, Japan and Korea – all controlled economies that have bought assets here in the supply chain and now our land.

Perhaps finally we are going to think strategically, identify our sustainable competitive advantages and benefit from assets that are grown and produced in Australia.

Get Australians and our assets working for Australia again. We welcome foreign investment not takeover.

This has been AUSBUY’s position since 1991.

www.ausbuy.com.au

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PEAK retail industry body the Australian Retailers Association (ARA) said despite the Reserve Bank of Australia (RBA) leaving the cash rate unchanged since August, credit card companies have been hiking up rates on their cards – leaving both retailers and consumers struggling to make the most of the festive season.

ARA Executive Director Russell Zimmerman said according to data from the RBA, the average interest rate on a standard credit card went up five basis points to 19.6 percent in November, and the average interest rate on a low-rate card went up 10 basis points to 13.05 percent in October.

“A number of banks have increased the rate on their credit cards by up to 100 basis points, and in one case up to 225 basis points.

“With Christmas just around the corner, shoppers are spending more than usual but we also know that people are trying to save as much as possible too. According to the Australian Bureau of Statistics, household saving is now at the second highest level since the global financial crisis erupted in 2008.

“While the ARA is pleased to see household saving on the rise, we also encourage consumers to increase their discretionary spending in Australian stores and support their local retail sector. With interest rates lower than they have been for some time, now is the time for credit card companies to provide some breathing room for consumers and retailers alike,” Mr Zimmerman said.

Since 1903, the Australian Retailers Association (ARA) has been the peak industry body representing Australia’s $258 billion retail sector, which employs over 1.2 million people. The ARA ensures retail success by informing, protecting, advocating, educating and saving money for its 5,000 independent and national retail members throughout Australia.

Visit www.retail.org.au

or call 1300 368 041.

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THE PEAK representative body for minerals and energy developers in Queensland has reiterated its commitment to working with the state government for a balanced and productive regional land use plan for Cape York.

Queensland Resources Council Chief Executive Michael Roche said the government’s declaration to ban open cut mining across the entirety of the Steve Irwin Wildlife Reserve was an unexpected blow to QRC member Cape Alumina, the company’s shareholders and to the confidence of the broader junior resources community.

"However, we must respect the government of the day’s right to make decisions in what they consider to be the state’s interests," he said. "The issue now is where to next – and that’s clearly the draft regional plan for Cape York on which the state government is inviting comment until 25 March next year.

"The resources sector has not strayed from its commitment to working with the state government to deliver the best possible outcomes for Cape York, Far North communities and for the environment.

"Open slather mining is not one of the options on the table and nor should it be.

"Mining has played a positive role in the Cape’s history and can play a similar role in its future with a regional plan that recognises and complements the region’s environmental, agricultural and resources strengths.

"‘Weipa’s celebration this week of 50 years’ continuous bauxite mining is tangible evidence of what that one operation has delivered especially in terms of employment and economic opportunity to local indigenous communities.

"‘The state government is offering Queenslanders a once in a lifetime opportunity to plan for the future of Cape York – a land mass bigger than England. It’s therefore essential that we get it right from the start."

Mr Roche said the state government has been at pains to point out that the plan is a draft and that they are open to hearing persuasive arguments for revisions.

"Over coming weeks the QRC and its member companies will bring to the table the rigorous science and evidence needed to demonstrate that projects currently facing some uncertainty under the draft plan can be delivered without detriment to the environmental values of the Cape," he said.

"Queensland has an extremely comprehensive set of requirements relating to the environmental assessment and management of mining, and these should be fully utilised to assess the merits of proposed resource projects.

"Industry working constructively with government is the surest route to delivering certainty for investors and shareholders and large numbers of well paid jobs in the Cape, especially for indigenous communities experiencing horrendous unemployment levels," he said.

http://www.qrc.org.auends

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VECCI congratulates the Victorian Government on the launch today of Victoria’s first Aboriginal Economic Strategy.

“It is important that this strategy provides a framework to support the future growth and development of Victoria’s Aboriginal businesses,” says VECCI Chief Executive Mark Stone.

“The effective linking of education, employment opportunities, business enterprise development and investment will be vital to ensuring Victoria’s Aboriginal-owned businesses reach their full potential.”

VECCI provides strong support for Victoria’s Aboriginal business community through its Aboriginal Business Advisor Program (ABAP), which is supported by the Victorian Government.

The ABAP provides a range of mobile and tailored support for operators or those wanting to start an Aboriginal-owned business in Victoria, including business and personal coaching, business tools and information, and networking workshops and opportunities.

Further information about the program can be found at www.vecci.org.au/abap 

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