UPDATED: THE decision to block the sale of iconic S. Kidman and Co to foreign buyers has been largely welcomed by federal politicians, while the agricultural sector has been cautious in its response.
As previously reported by FarmOnline, federal Treasurer Scott Morrison today announced the acquisition by foreign investors of S. Kidman and Co would be contrary to the national interest and the government would not authorise the sale to proceed as currently proposed.
Federal Agriculture and Water Resources Minister Barnaby Joyce said he agreed with the decision announced by the federal treasurer.
Deputy Prime Minister Warren Truss said the government had put in place new measures to ensure that acquisitions of Australian grazing properties were properly assessed, to ensure they were not contrary to the national interest.
The Australian Greens welcomed the Treasurer's decision to heed the FIRB’s advice.
Australian Greens agriculture spokesperson and WA Senator Rachel Siewert said the Kidman properties were not only iconic but had “high environmental values and are an important part of our agricultural production”.
“Given the iconic nature and environmental value of some of or part of these properties I would encourage the government to look at how some parts of the holdings could contribute to our conservation estate and/or Indigenous protected areas,” she said.
“The Australian Greens have long advocated for increased protections of our agricultural land and water.
“This includes an outright ban on the sale of agricultural land and water licenses to wholly-owned subsidiaries of foreign governments and a much more stringent national interest test.”
Senator Siewert welcomed the national interest threshold being reduced from $252 million to $15 million earlier in the year, but said “we can go even further”.
“We must exercise appropriate scrutiny that is critical to making strategic decisions about our land,” she said.
“The decision by the Treasurer is a step in the right direction.”
NSW Nationals Senator John Williams said the issue of S. Kidman and Co was debated at the last conference for the NSW Nationals where it was voted not to sell the iconic Australian cattle company to a foreign-owned state entity.
Senator Williams said he welcomed the treasurer’s decision today to block the sale determining it was not in the national interest.
He said foreign investment was good for the national interest but foreign takeovers were “bad”.
“The difference is if the foreign investors want to they can invest in growing jobs and business here but if they take over entities and profits are taken out of the country, I fail to see how that benefits Australia,” he said.
“I also find it amazing that governments overseas want to buy our country when we’re not trying to buy overseas land and farms.
“The Kidman family business is a huge part of Australian history and I’m glad to see it’s not going to be sold off to a foreign government and I commend the federal Treasurer Scott Morrison’s decision.”
Shadow Agriculture Minister Joel Fitzgibbon called for more clarification and information on the Treasurer’s decision to block the Kidman sale to foreign investors – but did not express disagreement.
“This is a very big decision,” he said.
“I’ve served on the national security committee of cabinet and understand form time to time there will be legitimate grounds for declining applications.
“But for confidence purposes, the Treasurer needs to provide more clarity about how the decision was made, and confirm there was a formal recommendation from the FIRB to block the sale, as he has suggested.
“I’d like to hear more from the Treasurer about government efforts to encourage a different sale model which might overcome any legitimate national security of national interest concerns.
“If we’re to meet our aspirations in Australian agriculture we’ll need very large amounts of investment and foreign investment will be a crucial component, particularly in infrastructure terms.
“Family farms everywhere are carrying debt and face lower land prices in the absence of foreign investment.”
NSW Liberal MP Angus Taylor said the Kidman proposition was a “big chunk of dirt which covers military testing area” and on that basis, the Treasurer’s decision to block the sale in its current forum was “understandable”.
But he said it was important to remember Australia had one of the least restrictive foreign investment regimes amongst comparable countries.
“The important issue is we do need more investment in agriculture and we’ve left ourselves open to alternative structures or options, for this,” he said.
“The Treasurer made it clear in his statement today that alternative sale options can be considered so long as it meets the national interest.
“I think the security issues are not new ones and foreign investments have been rejected in the past, on the same basis.”
Independent Senator for South Australia, Nick Xenophon, said while he welcomed Mr Morrison's announcement, it highlighted the need for an urgent overhaul of foreign investment rules and laws.
Senator Xenophon said the rejection of the foreign bid for the S. Kidman and Co was in “stark contrast to the gobsmacking decision to allow the Port of Darwin to fall into the hands of a Chinese company with close links to the Chinese government and the People’s Liberation Army”.
“What doesn’t make sense here is that an iconic cattle property is to be kept in Australian hands on national interest grounds, but a key strategic asset like the Port of Darwin is subject to a foreign takeover with barely a whimper form the Foreign Investment Review Board,” he said.
“This is not about being anti foreign investment – it is about a level playing field. I can’t imagine the Chinese government would allow a foreign company to control the Port of Shanghai let alone one with links to the military.”
Senator Xenophon said he would be seeking an urgent Senate inquiry into the circumstances of the Port of Darwin deal when Parliament resumes next week.
Industry calls for more details
National Farmers’ Federation CEO Simon Talbot said the peak farm body has been watching the sale closely, and will be seeking clarity on how the national interest test is applied as well as further detail on Mr Morrison’s decision.
“We respect the federal government and Foreign Investment Review Board’s right to make decisions concerning matters of national security,” Mr Talbot said.
“We are seeking further detail on the next possible steps with respect to this sale, and understand the Treasurer’s willingness to consider future proposals based on their merits.
“Foreign investment in agriculture is always a sensitive matter because of the need to balance the national interest against the need to attract new capital into the agricultural sector.
“Agriculture is on the cusp of its boom cycle, but the need for capital investment is a significant roadblock to growth. To realise its potential, the sector needs $1.2 trillion over the next 40 years, sourced both domestically and from overseas.
“Intense interest from around the globe in the Kidman properties underscores the massive potential of Australian agriculture – an industry positioned for strong and sustained growth over coming decades.
“The NFF looks forward to continuing to work with the Government on the issue, to ensure that the ultimate outcome is good for Australia and for its farmers."
Northern Territory Cattlemen’s Association Tracey Hayes said based on what her group understood, they respect the Australian government’s decision on blocking the sale of Kidman.
“We are not in a position to comment on the specifics of this decision,” she said.
“However we support foreign ownership where it drives investment, infrastructure, local employment and opportunity for Australian business.”
Ms Hayes said foreign investment was vital to the future growth and development of Australian agriculture and had played an important foundational role in the north of Australia.
She said the NTCA, in conjunction with the NFF, had supported the introduction of a register of foreign investment in Australian farmland to allow for greater transparency and to assist with FIRB decision making.
“The challenge is to find a balance between what is in our nation’s interest and not discouraging or hindering the free market process which includes, importantly, investment originating from a range of foreign countries,” she said.