Our rocky af­fair with for­eign in­vest­ment

The Weekend Australian - Review - - Books - Richard Fer­gu­son is a free­lance jour­nal­ist and critic.

Richard Fer­gu­son Takeover: For­eign In­vest­ment and the Aus­tralian Psy­che By David Uren Black Inc, 220pp, $29.99

David Uren is one of those rare jour­nal­ists who can as­sim­i­late eco­nomic gob­bledy­gook and turn it into a great read. More than 30 years as a busi­ness re­porter and colum­nist — he is The Aus­tralian’s eco­nom­ics editor — has given him a front-row seat to decades of eco­nomic change. In his latest book he turns to one of the thorni­est of eco­nomic is­sues, for­eign in­vest­ment.

Takeover: For­eign In­vest­ment and the Aus­tralian Psy­che is Uren’s history of Aus­tralia via its tor­rid re­la­tion­ship with over­seas in­vestors. We’ve thrived for decades on the pa­tron­age of other na­tions but a sig­nif­i­cant part of the vot­ing public seems to be against for­eign­ers hav­ing any size­able stake in our lands or our mar­kets.

So what has for­eign in­vest­ment ever done for us? And why does it re­main such a po­lit­i­cal live wire?

We’re lucky to have Uren as a guide. This book ex­hibits both his gift for ex­plain­ing com­plex eco­nom­ics to the per­son in the street and his abil­ity to cre­ate a vivid and en­ter­tain­ing pic­ture of Aus­tralia through the years.

Does he have a par­tic­u­lar slant? Well, yes, he doesn’t turn his nose up at for­eign in­vest­ment. But Uren still lets the doubters (from Barnaby Joyce to Chris­tine Milne) have their say, and this book of­fers a fair and open-minded anal­y­sis of the prob­lems as­so­ci­ated with for­eign in­vest­ment.

Uren is more than aware his view does not have wide public ap­peal. He notes con­ser­va­tive com­men­ta­tor Tom Switzer “has ar­gued, on the ba­sis of the po­lit­i­cal opin­ion polls, that the gulf be­tween ‘elite’ opin­ion and the public at large is greater on for­eign in­vest­ment than any other is­sue’’. He goes on to quote Switzer: “Not many po­lit­i­cal is­sues stir the emo­tions in the way that for­eign own­er­ship does. It is a sub­ject that pro­vokes deep, vis­ceral feel­ings of pos­ses­sion, sol­i­dar­ity and na­tional iden­tity.’’

This emo­tional re­ac­tion can cre­ate the most un­likely al­liances. From trade union­ists to sub­ur­ban Lib­er­als, small farm­ers to en­vi­ron­men­tal­ists, ev­ery side of pol­i­tics has its for­eign in­vest­ment haters. Uren reck­ons that af­ter the Hawke-Keat­ing era “there was a con­sen­sus, at least at the apex of both the La­bor and Lib­eral par­ties, that free trade and open­ing to the world pro­vided the foun­da­tions of Aus­tralia’s pros­per­ity”. But Takeover does make you won­der just how many peo­ple (even among our politi­cians) that “apex” rep­re­sents.

Uren’s history takes us from Ed­mund Bar­ton to Tony Ab­bott, map­ping out how much for­eign in­vest­ment has helped and hin­dered our prime min­is­ters. Just think, the first fed­eral elec­tion was a close race be­tween the Free Trade Party and the Pro­tec­tion­ist Party. Pro­tec­tion­ism would take a hit un­der Robert Men­zies — es­pe­cially as the min­ing in­dus­try loomed ever more pow­er­ful — but na­tion­al­ist lead­ers such as John Gor­ton and Gough Whitlam would stymie the move to­wards Aus­tralia fully open­ing its mar­kets to the world.

Uren ar­gues the is­sue didn’t make much progress un­til Bob Hawke and Paul Keat­ing floated the dol­lar in De­cem­ber 1983. That decisive mo­ment of eco­nomic revo­lu­tion al­lowed Aus­tralian busi­nesses to blend with the for­eign in­vestors. And by Uren’s ac­count the likes of John El­liott, Robert Holmes a Court and Alan Bond rather liked play­ing around in for­eign mar­kets. He quotes Bond: “There were no real lim­i­ta­tions to where you could go when it came to busi­ness, so long as you were pre­pared to take on the task and plan it prop­erly.’’

This is the strong­est part of Uren’s book and it adds a more hu­man el­e­ment to un­der­stand­ing what was a mas­sive po­lit­i­cal and eco­nomic shift. Ba­si­cally, we never liked for­eign in­vest­ment un­til we un­der­stood just how much fun it could be. “There’d been noth­ing like it,’’ Uren writes, “since the Seek­ers, Bee Gees and Easy­beats hit Lon­don in the six­ties.’’

And what about to­day? Yes, for­eign own­er­ship rules are far less re­stric­tive, but Uren sug­gests the de­bate hasn’t changed that much. Think of how we talk about Chi­nese in­vestors in the Syd­ney hous­ing mar­ket.

And most cru­cially for Uren, there’s the in­ef­fi­ciency and hypocrisy built into our in­vest­ment sys­tem which he feels is just a sop to na­tion­al­ist diehards. “The sys­tem of vet­ting is there to sat­isfy the public [that] there is a sys­tem of vet­ting.’’

Takeover is a fast-paced, easy-to-read and rather funny (well, as funny as eco­nom­ics can be) book. It prob­a­bly won’t con­vert the Barnaby Joyces of this world, but Uren gives it a good shot.

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