Tony Abbott defends Joe Hockey on GrainCorp decision

http://www.theguardian.com/world/2013/dec/02/tony-abbott-defends-joe-hockey-on-graincorp-decision

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Joe Hockey was right to block Archer Daniels Midland’s takeover of GrainCorp in defence of Australia’s national interest because ADM was a “huge multinational company subject to agripolitics”, prime minister Tony Abbott has said.

Hockey has been accused of caving in to the concerns of the Nationals, who had threatened to split the Coalition if the $3.4bn takeover was approved. He said on Friday he had taken the decision because there was still insufficient competition in the Australian grain handling industry and in order to maintain public confidence in foreign investment in general.

But speaking on Brisbane radio on Monday, Abbott said there were also issues concerning ADM itself that had contributed to the decision.

“Having a very large overseas company take a virtual monopoly in our grain handling industry, particularly an overseas company that is so subject to agripolitics in the United States” was quite rightly determined by the treasurer to be against the national interest, he said.

Abbott also commented on the debate about Qantas’s claim that it needs either some kind of government assistance or a relaxation or foreign ownership restrictions to fairly compete with rival Virgin Australia, which is receiving substantial capital injections from its foreign shareholders.

Abbott downplayed the idea of the government again taking an equity stake in Qantas and was critical of the idea of a government guarantee for Qantas’s debt, but did not rule out a change to the rule that the national carrier must remain 51% Australian-owned.

“I am not sure [Qantas] really wants to see a new government shareholding and the problem with providing a new government loan guarantee is where does that stop – if you do that for one business, why shouldn’t you do it for another business?” he said.

He said the government’s role was “to try to ensure we have a strong and competitive aviation sector – that is our principal role. Obviously, as citizens we would like to see the flying kangaroo flourish, but our principal role as the government is to try to ensure we have a strong and competitive aviation sector, so that australians have access to the kind of aviation services at the right price that they have come to expect.”

He said his “political instinct” was to favour less regulation, but that had to be “tempered” by national interest considerations and, like Hockey, he called for a “community debate” about the value Australians placed on the role of a national airline.

Announcing the Graincorp decision last week, Hockey said, “Many industry participants, particularly growers in eastern Australia, have expressed concern that the proposed acquisition could reduce competition and impede growers’ ability to access the grain storage, logistics and distribution network. Given that the transition towards more robust competition continues and a more competitive network is still emerging, I consider that now is not the right time for a 100% foreign acquisition of this key Australian business.”

GrainCorp chief executive Alison Watkins announced on Monday she would leave the company at the end of January.

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