23 February 2016
Transcript - #2016021, 2016

Interview with Ben Fordham, 2GB

SUBJECTS: Approval of foreign investment application for purchase of the Tasmanian Land Company; Ray Hadley program

BEN FORDHAM:

Let’s go right now to the Treasurer Scott Morrison who is on the line from Parliament House, Canberra. Scott Morrison, good afternoon.

TREASURER:

G’day Ben.

FORDHAM:

You’re not a popular man this afternoon.

TREASURER:

Well, the Treasurer is a hard job but there are a number of facts Ben I have to run you over and some of the things you said in your introduction…

FORDHAM:

Don’t run me over. Don’t run me over.

TREASURER:

…in your introduction are just simply not true.

FORDHAM:

What’s untrue?

TREASURER:

This is what happened - in late 2011 this company sought to raise equity from the markets…

FORDHAM:

When you say this company?

TREASURER:

VDL – the company, which is a foreign owned company. This has been a foreign owned company since the 1800s. It has never been in Australian hands.

FORDHAM:

Yes, we have stated that many times.

TREASURER:

So, in late 2011 they tried to raise capital for the sale of the business – they were unsuccessful. In mid-2014 they went out to the market to seek to sell this business and by the end of 2015 they went through a process in which there were a number of Australian bidders including one called TasFoods in which Ms Cameron was involved. They bid $250 million – TasFoods. The winning bidder – Moon Lake – was $285 million. So, there was a full process run by the company. It wasn’t the government running the sale it was the company running the sale and they took the best offer of $285 million and they entered into a contract with that company to buy that business. At that point that sale is conditional on foreign investment rules in Australia which everybody understands. So, my job was to evaluate whether that sale which had gone through on that sort of process where Australian companies had bid and been unsuccessful, including the one that Ms Cameron was involved with and determine whether it was against the national interest.

FORDHAM:

So, if I could jump in for a moment, so what you are saying to me is that the second bid from Jan Cameron, the counter bid to the successful bid from the Chinese investors you are saying that that wasn’t even taken into consideration?

TREASURER:

That came in after the process. So, they had gone through a full process and they hadn’t been successful, TasFoods, but the other company, Moon Lake, had been successful and what then comes to the Government is the approval of the $285 million sale.

FORDHAM:

So while that is before the Foreign Investment Review Board you were also made aware by Jan Cameron and her fellow investors that they had now upped their bid to, I believe, $280 million – not $285 – because the figure that had been shared publically was $280 million. So, they then increased their bid to $280 million. Did that not give you an opportunity to say righto we have got a Chinese bid at $285, we have got an Australian bid at $280 – we have got to give this careful consideration.

TREASURER:

And these are the considerations - so you have got a contracted sale where people have the finance and they have the dough. They have got an investment proposition which they have confirmed of an additional $100 million in the business. They have guaranteed all 140 jobs…

FORDHAM:

Ok but I think you are skipping ahead too quickly on this.

TREASURER:

No, this is part of the consideration.

FORDHAM:

But I just want to know whether the revised bid from Jan Cameron was taking into consideration. It sounds like it wasn’t.

TREASURER:

Ben, this is what I am getting to. The investment proposal in front of the government was one where we knew there was the money, where they were absolutely committed and when it came to the settlement date that the money would be paid and what would flow from that was the protection of the 140 jobs that were there in addition to 95 new jobs that would flow from an additional $100 million in investment. The company has agreed to ensure that they pay tax on all of the earnings they have in Australia and not engage in the transfer pricing practices which would see money shift offshore to China. That is the first time. I introduced this new requirement for this particular transaction because I wanted to make sure the jobs were protected, the investment was in place and the tax would be paid.

FORDHAM:

This was an opportunity and I know that it was owned by New Zealand, it has always been owned by New Zealanders but this was a once in a lifetime opportunity for Australia’s largest dairy farm and oldest dairy farm to be in Australian hands.

TREASURER:

Ben, it is birds in hands and two or three in the bush because…

FORDHAM:

You didn’t think Jan Cameron and her fellow investors had the money?

TREASURER:

It wasn’t the same offer as what was already with the contracted buyer. It is a bit like this, let’s say you sell your house and you have entered into exchange of contracts and you were trying to sell your house for two years and then someone comes up to you after you have exchanged contracts when you know you are going to get paid on settlement and they are standing on your front lawn and they say I want you to rip up that contract because I think I might be able to get the finance to buy the house at the same price and we can settle sometime after that.

FORDHAM:

But there is a big difference Mr Morrison. My house does not fall, it is not so big that it falls under Foreign Investment Review rules.

TREASURER:

We are running a modern economy in a place where people have to be…

FORDHAM:

But the Foreign Investment Review Board and the Treasurer of Australia had the power to stop this sale and allow it to fall into Australian hands.

TREASURER:

Do you know what the net result of that – and this is why I consulted with the Tasmanian Premier and why I consulted with the local member for that area because the locals down there want this sale to go ahead because they know the jobs are secured and the investment is going to be there and that gives them a future. Now, we could have said, “oh maybe they will get the money together – maybe they might.” So what happens? The person who was going to buy the business, who had already contracted to do it had their finance in place and guaranteed the jobs and the investment, we tell them to go away and then what happens? If it all falls through, Ben? Months from now and I have people knowing at my door and say “how did you allow that to happen in Tasmanian when those jobs and that investment was secured on the maybe that something else might have been able to turn up”. There was a proper process, Australians had the chance to bid, including Ms Cameron who was part of the TasFoods group and they didn’t come up with the same amount and what they wanted the Government to do is crack it open again which would send terrible signals to investor confidence. We do need to attract foreign investment to this country. We have been doing it since 1788, it is an important part of how people are able to get jobs in this country and if we say that the Government is going to crack open a process that was properly conducted, I mean this company has a good reputation for operating in Australia, and say to the 235 Australians that no we are going to take a chance on your job that someone else might show up with the money…

FORDHAM:

But Scott, is the largest dairy farm in all of Australia not worth taking those chances on? If you have got an option here and you have got an Australian bidder who is coming, reportedly, I believe at $280 million and saying oh no well the Chinese bid was $285 million. Is it not worth taking that extra time to actually work out whether or not the money is there? Whether or not they are willing to match all the other guarantees that are coming in from Moon Lake Investments based on the premise and the premise alone that this would be a once in a lifetime opportunity to have the biggest dairy farm in the country in Australian hands.

TREASURER:

Well, it is less than 1 per cent of Australians milk production for a start, ok, so we need to get that in context but there are 235 people whose jobs depend on this Ben and an important part of Tasmania and Tasmania is doing a lot better now and we want that to continue…

FORDHAM:

Can I read you some of the feedback that is coming in? Are you interested in hearing it?

TREASURER:

Of course I am.

FORDHAM:

Alan says, “Scott Morrison, I was your biggest supporter, I argued your case on many occasions but in this decision to sell off Australia our farm land to the Chinese, you and your ineffective Party have lost my confidence and vote”. Marilyn says, “I am disgusted at the sale of VDL to foreigners, Chinese or otherwise. Our politicians don’t give a damn about our sovereignty.” Ken says, “why are our politicians such traitors? Scott Morrison should be thrown out of office for putting a foreign government ahead of Australia’s best interests.” Stacey, would like to say how “disappointed I am with the Government and the decision today. What about our own food security?” What about our own food security Mr Morrison?

TREASURER:

Explain to me what the threat to the food security is given the company that has bought VDL is honouring all the same contracts that the previous New Zealand company had and by the way they were selling it to a New Zealand Company.

FORDHAM:

What about the buyer – the Chinese buyer – and their track record at paying tax in Australia?

TREASURER:

Well, this is why for the first time I put as part of this agreement the requirement that they do all that is necessary to not engage in transfer pricing and they pay their tax here in Australia. If they were not prepared to agree to that that was one of the key conditions and that was a new condition I put on this sale. Ben, I know people are upset about this and the reason I came on to your program was that I understand that but I wasn’t going to explain why we made this decision and it was about investment and jobs for people in Tasmania. The locals in Tasmania want this sale to go ahead.

FORDHAM:

What is happening with Kidman & Co, Australia’s largest cattle empire?

TREASURER:

Well, I am pleased that on that one and I made the decision there because there weren’t other Australian buyers in it at the end, the size of the land holding was so large that it largely knocked out all of the Australian bidders and I said no to that one and people applauded that decision. So, they liked that one, they didn’t like this one.

FORDHAM:

Billionaire trucker, Lindsay Fox is making a late bid.

TREASURER:

That’s great and he will be able to do that because I made that decision, Australian companies. They have reopened the whole sale process and they will go through that sale process.

FORDHAM:

Have you spoken to Lindsay Fox about this?

TREASURER:

I don’t need to talk to Lindsay because Lindsay needs to talk to the people who are selling.

FORDHAM:

Have you spoken to Lindsay Fox about it?

TREASURER:

No, I haven’t. Why would I talk to Lindsay about it? I am not selling the property.

FORDHAM:

I’m just wondering because you have got a say in these things. I mean you decide whether they are going ahead or not, I was just wondering whether or not you had discussed it with him but you haven’t.

TREASURER:

I don’t get involved with the commercial parties here. That is not my job. The Kidman family –Kidman & Co they will go through their sale process. That is not done with the Government. They will go through that and whoever comes out of that process they will submit an application and then we will consider it at that time.

FORDHAM:

Mate, I know you are not afraid of feedback.

TREASURER:

No, not at all.

FORDHAM:

This one, Jane, “I cannot believe the Ministers decision to allow a Chinese consortium to buy an Australian asset over an Australian. I am in shock, Scott Morrison” Debbie says, “I am terrified…”

TREASURER:

Ben, just let me, on that one again. Australians were part of the bid process, there were a number of Australian consortiums, including one that was involving Ms Cameron and they were unsuccessful.

FORDHAM:

But if a foreign bidder turns up with more money than it goes to them?

TREASURER:

Well, there was an open process. People could bid, they could participate. That is how our economy works. Now, if people are asking the Government to basically become, if you like, involved in the bidding process of how people buy companies in this country well, basically that is the sort of thing they do in socialist countries. We are not one of those.

FORDHAM:

I know there is some emotion here but let me read this to you, Terry says, “I am shocked with the decision by Scott Morrison to sell off the farm. Ask him where will his grandchildren get their baby formula as in 10 to 20 years’ time we won’t be seeing any of the milk produced in Tasmania.” I know you are saying that that has been guaranteed.

TREASURER:

They are honouring the same sale contracts. We have just done the biggest free trade deal with China in our country’s history. Now, I think it is a good thing that Australians get to sell their services, their professional services, goods, manufactured goods, primary products, all of these things to the rest of the world. That is how we have earned a living for over 200 years. Ensuring that we continue to attract investment and continue to engage in trade, these are the things that enable my kids to have jobs in the future and your kids to have jobs in the future. So, I understand that people don’t like this decision Ben and they won’t like it for a range of reasons and whether it is on the Kidman decision where I made a different call because of the circumstances of that one or on this case where jobs, investment and tax were all protected in the arrangement and there had been a fair process. I mean you can’t use the FIRB process because you are unsuccessful in the earlier one and ask people to just blow it all open. We run an orderly process in this country and that was followed. I understand people don’t like it but I am being pretty up front with them. I think people know that about me, that I will be really upfront that is why I was really happy top come on your program and I am sure there will be more emails and more messages…

FORDHAM:

What can Jan Cameron do now? Does she have any right of appeal or the horse has bolted? It’s over?

TREASURER:

The contract of sale. She had an opportunity as part of the bid process like everyone else and she was unsuccessful in that bid process. These processes go on every single day. People will buy houses this weekend on the same basis and if you have a process which says after you have exchanged contracts that you can just somehow turn up and turn the whole thing on its head, well that is not an orderly system to run an economy.

FORDHAM:

No matter the size or significance of the land?

TREASURER:

Well, it was an orderly process Ben. People had the chance…

FORDHAM:

But there are special considerations.

TREASURER:

You are asking me to say…

FORDHAM:

There are special considerations as you know Treasurer based on the national interest test.

TREASURER:

There was no offer, there was an unsolicited, expression of interest.

FORDHAM:

Unsolicited.

TREASURER:

No financial backing, no details of any of those…

FORDHAM:

So, it was a bogus offer from Jan Cameron?

TREASURER:

That is not what I said Ben and that is a very unfair way to characterise it.

FORDHAM:

Oh come on, you know that is what you are suggesting.

TREASURER:

What I am saying is that what they had in the contract is what they knew would be delivered and that meant more jobs and more investment in Tasmania. I am about jobs and growth and if that is going to tick the box on jobs and growth then, you know, I am not going to apologise for keeping people in jobs in Tasmania.

FORDHAM:

If I can ask you about something else before I let you go.  For as long as I can remember you have been appearing on Ray Hadley program every Monday.

TREASURER:

I'm so glad he misses me, I miss him too. I'm looking forward to talking to him soon on radio again.

FORDHAM:

Yesterday you were missing in action Treasurer.

TREASURER:

I was at my desk, at work meeting with Treasury officials, putting the Budget together and working on taxation issues which I think is where Australians expect me to be. I have been on the program every week and if I have missed one because I have been busy, because I am the Treasurer pulling together a Budget, I apologise but I will be back again next week.

FORDHAM:

Any truth to the rumour you were hiding under the desk?

TREASURER:

That's crap Ben and I think that's a bit cheap.

FORDHAM:

Well, I'm just wondering, there is no chance that you were ducking the interview because you didn't want to...

TREASURER:

Ben, that is cheap.

FORDHAM:

I'm asking the question, Treasurer.

TREASURER:

Mate, I have fronted up to every interview for years and years...

FORDHAM:

I know but the heat was particularly on yesterday...

TREASURER:

...throw bricks at me.

FORDHAM:

But hang on a minute, yesterday as you know there was a shocking Newspoll and there were plenty of other things that I'm sure that you would have been asked about, you are telling us that you were just too busy on the day?

TREASURER:

Ben, I had a Party Room meeting at 9:30, I am the Minister representing the Special Minister of State. I was introducing legislation into the Parliament...

FORDHAM:

Did you tip them off the week before to say ‘listen I'm going to have a problem with my diary next week’?

TREASURER:

Mate, I am going away tomorrow night, this was a very tight sitting week...

FORDHAM:

Hang on.

TREASURER:

Ben, if you want to suggest I don't front up in front of the media.

FORDHAM:

Oh come on, Scott.

TREASURER:

Well I think people can look at my record.

FORDHAM:

I'm not doing that, don't get sensitive.

TREASURER:

No, you are Ben.

FORDHAM:

No, don't get sensitive, don't get sensitive I'm just asking the question and I think considering that 2GB listeners, particularly, would be used to you turning up on a Monday, they would be intrigued by this as well and I'm just poking and trying to find out the story.

TREASURER:

No, Ben you are insinuating, I don't appreciate it. I have always been upfront with your listeners on every single program, I explain my decisions, people know what I stand for and I've always sought to be very clear with them. That's why I've come on your program this afternoon. And if you don't like the decision I've made on this one, you are entitled to that and everyone who has a view on that is also totally entitled to that. And I respect that but governments have to make decisions and I've made a decision on this. I made a decision on Kidman and people have had different reactions to both of them, but that's the business, that's what Treasurers are paid to do, make decisions.

FORDHAM:

Ok, as you know I've always said look no matter how hard people shake, Scott Morrison tends not to fall out of the tree so I just get a little sense that you are a little bit glass jaw about my very mild criticism in the last few minutes.

TREASURER:

No, Ben mate I thought it was a bit cheap.

FORDHAM:

Ok, I look forward to talking to you again soon.

TREASURER:

No worries.