12 August 2016
Transcript - #2016103, 2016

Interview with Michael Brissenden, ABC AM

SUBJECTS: Foreign investment applications for the 99 year lease of Ausgrid; 2016 Census

MICHAEL BRISSENDEN:

I am joined live from our studio in Sydney by the Treasurer, Scott Morrison. Treasurer, good morning.

TREASURER:

Good morning, Michael.

BRISSENDEN:

So, without getting too detailed to start with what is the process for these decisions? How does the Foreign Investment Review Board and yourself make these decisions?

TREASURER:

Well, the Foreign Investment Review Board reviews these applications, it takes advice from the various agencies that input into these applications and these decisions. They provide me with advice and at that point I will regularly then seek further advice and confirmation advice from those agencies particularly national security agencies and then a decision is taken. These decisions are taken under the Act by the Treasurer in the same way that the Environment Minister makes particular decisions in his portfolio or her portfolio and of course I recall as Immigration Minister, there are those powers also vested in the Immigration Minister. So, that's how the process works. It's designed to ensure that at the end of the day a decision is made by someone who is accountable to the public as a Minister and as an elected official.

BRISSENDEN:

So, we can assume something changed in the assessment of one of these companies at least which is the Chinese Government-owned State Grid, because that company was cleared, as we all know, as a potential bidder for the TransGrid asset sold by the New South Wales Government last year. It also does own 60 per cent of a Queensland Gas pipeline and significant stakes in ACTEW-AGL, electricity and gas here in Canberra and a minority stake in poles and wires in South Australia and Victoria, so what changed in relation to this company?

TREASURER:

Well, Michael, you're making an assumption which others are making which is just not true. Just because someone has had an investment in another asset, at another time, under another set of arrangements does not pre-qualify them necessarily for a different asset. The issue here is very much about the asset itself and the structure of the ownership and the control of that asset and that's where the national security issues arise. While aggregation issues, i.e. owning others and then picking up a similar asset was not particularly an issue in this case it doesn't mean that aggregation is not an issue that is also considered. So just because you own something doesn't mean you get to own something else.

BRISSENDEN:

Even if it's similar, if it's an electricity...

TREASURER:

Even if it's similar because there are aggregation issues of ownership that can also relate to national security and national interest considerations. I am not saying that was the case on this occasion but they're real interests that are assessed. As I said yesterday, this was not a country-specific decision.

BRISSENDEN:

Are you concerned you are sending a negative message to China though? Because it does seem like the Chinese are the ones who are singled out, more recently at least, in these decisions.

TREASURER:

Well, we didn’t identify the bidders. That was done in the public domain by others and there are…

BRISSENDEN:

[Inaudible] inevitably going to come out.

TREASURER:

Although there were two bidders from one country but that is why I was at pains yesterday to suggest that this applied to all the applications and was not a country specific decision. So, my primary interest is the national security interest. I mean when it comes to these matters that issue must be paramount. Now, the advice was consistent with the decision that I have taken on this. Now, I can appreciate that there are others who have been commentating on this issue who aren’t privy to that advice and particularly for a former foreign minister wouldn’t expect to be privy to that advice once they have left office. I have spoken to the Shadow Treasurer on this issue and the opposition is able to take up a briefing on this issue and I have no doubt that Mr Bowen will.

BRISSENDEN:

You are talking about Bob Carr there. We will come to his comments in a minute but isn’t the trouble here one of consistency? I mean last year Chinese interests were allowed to buy a 99 year lease on the Darwin Port. What could be more important on national security terms than the sale of a port?

TREASURER:

Well, again, that was a private company that was purchasing that asset that was put up for sale by the Northern Territory Government and at that time under the regulations that existed at that time there was no FIRB approval for that transaction. So, that matter was never decided by FIRB or by the Federal Government. Now, following that instance I consulted with all the state and territory treasurers and we now have a process that even when the interest is a private one – not a state owned enterprise – then those matters will now come before FIRB. Now, how that decision would have been made in that circumstance, well, that would be a hypothetical decision now for the Government. They made that decision in the Northern Territory based on the information they had available to them and the Defence Secretary had his comments on these issues were very public. But Michael, again, the asset and the structure of the asset sale and the control of the operations of that asset is what was germane to the national security issues here. So, every transaction is different. Every asset is different and you just can’t draw linear lines between different decisions and draw the assumptions that I think many are making and are making falsely.

BRISSENDEN:

One of these companies you have blocked is also a private company though – isn’t it? Hong Kong’s Cheung Kong Infrastructure Group – that is a private company?

TREASURER:

Yes it is.

BRISSENDEN:

I mean Bob Carr says, to go back to that, Bob Carr says that the decision you have made is a response to the “witches’ brew of xenophobia unleashed by the election”.

TREASURER:

That is complete nonsense Michael and frankly the former Foreign Minister should know better that when Treasurers and others who are serious in this business are considering national security issues we take advice on these things and we make decisions that are consistent with the national interest which I am sure he would have done as a Minister and I am certainly doing. I think those sorts of comments are unfortunate, disappointing and Bob has a flair for this sort of stuff we have seen in the past and he still seems to indulge that from time to time.

BRISSENDEN:

Nevertheless, it is true that several crossbenchers in the new Senate; Pauline Hanson, Nick Xenophon, Bob Katter, they weren’t keen for the State Grid bid to be approved. Now, Bob Katter says he will be sending you a congratulatory letter but the fact is…

TREASURER:

I will put it with all the other ones he has sent me. Some as the others aren’t as flattering.

BRISSENDEN:

The fact is you will need their votes, won’t you, in the future? Would negotiating with them have been more difficult if you hadn’t made this decision?

TREASURER:

I don’t trade on national security. And the suggestion I would, Michael, I don’t think you are making that suggestion but that’s not something that I would do. These issues, these decisions are serious decisions. I get advice from serious people on these decisions and I make decisions based on that advice. But at the end of the day the Treasurer has to make the decisions on this whether it is me or previous treasurers from either side of politics. You are accountable for those decisions and many of the decisions I have made have been criticised for approving investments and others I am criticised for rejecting but I have to make those calls and I make them based on the best advice available to me and using my judgment.

BRISSENDEN:

This issue, as a New South Wales Liberal I am sure you are aware, became a big one during the New South Wales election campaign in 2015. When Labor criticised the deal during that campaign they were called out for being xenophobic and racist. Joe Hockey said at one point that the New South Wales Labor campaign contained an element of xenophobia and racism that he hadn’t seen in his 20 years of politics. What is different about your decision?

TREASURER:

Well, my decision is not country specific. Decisions have already been made about approving other potential bidders with a range of different nationalities including from China. What happened in the New South Wales election is the Labor Party ran spooky ads talking about, ‘oh, they might sell it to the Chinese’. Now, that’s very different from the sober decision that I have made as a Treasurer based on national security advice to put the national interest first and look at the very specific issues related to this particular transaction. I stress again, this is about issues very specific and unique to this asset and the structure of this transaction. That is what the decision has been based upon and I think that the assumptions and the extensions that have been drawn by some in relation to this decision are misplaced, they are inaccurate and in some cases, mischievous.

BRISSENDEN:

Can I just ask you a couple of quick questions about the census? Will you be seeking compensation for the cost of this debacle from IBM?

TREASURER:

You can expect the Government to look so thoroughly into this to understand where the ultimate system failure occurred and where that responsibility lay…

BRISSENDEN:

And if it lies with IBM you will be looking for compensation?

TREASURER:

…and if there are issues that relate to the service provider in this case then you could expect us to pursue that to the nth degree. What happened here is that people were contracted some years ago back in 2014. The decision to go to the e-census was taken back in 2011. It was provisioned in the 13-14 Budget. So, the resources were there. The capability assessments and reviews were undertaken. The assurances were provided and the events of 48 hours ago or thereabouts, just over that, occurred. Now, I went on last night and completed the census online. Hassle free. I thank people for their patience when I went on Facebook and suggested that they also now do so. The census is incredibly important. I know you have got the statistician coming up on the program but he will tell you over 400,000 forms have been completed since the system went online again last night and I encourage Australians, this census is important, what we have done this week is work the problem. The Prime Minister and I and Minister McCormack and the statistician to get it back up online. The important thing now is to get on with the job. I know others have engaged in some politics on this. We haven’t engaged in the politics on this. We have just got on with the job, working the problem, fixing the problem – now let’s get on and fill out the census.

BRISSENDEN:

Ok, Treasurer, we will leave it there. Thanks very much for joining us.

TREASURER:

Thanks very much, Michael.