Our rocky affair with foreign investment
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.