Un­wanted out­rage

Warwick Daily News - South West Queensland Rural Weekly - - News -

SHOULD we be out­raged if a for­eigner sells an Aus­tralian prop­erty to an­other for­eigner?

Well, we have in the past and are more than likely about to be again very soon.

And again it will show the al­most schiz­o­phrenic way gov­ern­ments deal with land sales to for­eign­ers.

The Con­sol­i­dated Pas­toral Com­pany hit the mar­ket, send­ing a surge of ex­cite­ment though the ru­ral in­vest­ment sec­tor.

This is as big as they come. CPC was founded by the late me­dia mogul Kerry Packer in the 1980s be­fore be­ing sold by his son, James, in 2009, to UK com­pany Terra Firma.

It com­prises 16 cat­tle sta­tions across Western Aus­tralia, the North­ern Ter­ri­tory and Queens­land, run­ning about 400,000 cat­tle.

To give an idea of its vast­ness, all the sta­tions com­bined are com­pa­ra­ble in size to Switzer­land.

The price be­ing bandied about is $1 bil­lion, which the ex­perts reckon is not too far off the mark, and puts the $365 mil­lion sale of the S Kid­man and Co prop­er­ties in 2016 in the shade.

That sale, you may re­mem­ber, got tan­gled up in a stop-start process by a very ner­vous fed­eral gov­ern­ment that did not want an iconic Aus­tralian com­pany fall­ing into for­eign hands, even if most of the sale com­prised leases, so the land would still be “owned” by the gov­ern­ment.

Kid­man even­tu­ally sold to West Aus­tralian min­ing mag­nate Gina Rine­hart, who bought it in a ma­jor­ity part­ner­ship with Chi­nese Com­pany Shang­hai CRED Real Es­tate Stock Co.

The hefty price of CPC puts it well be­yond the means of most lo­cal in­vestors (Terra Firma bought it for a re­ported $425 mil­lion in 2009), so we face the prospect of a for­eign buyer tak­ing con­trol of a large chunk of Aus­tralian farm­land.

Or rather, an­other for­eign owner be­cause Terra Firma is a for­eign com­pany. Even if some con­sider “for­eign” to be code for Chi­nese.

The CPC sale is the first real test of the Fed­eral Gov­ern­ment’s new for­eign own­er­ship rules, which re­quire farm­land worth more than $15 mil­lion to be ad­ver­tised widely for at least 30 days to do­mes­tic buy­ers be­fore a for­eign in­vestor can pur­chase it. That has caused some un­ease in the big end of town, which usu­ally likes to keep trans­ac­tions out of the spot­light, sell­ing large farms with lit­tle or no fan­fare.

Plus, any land sale over $15 mil­lion is also sub­ject to For­eign In­vest­ment Re­view Board ap­proval.

The CPC sale is an in­ter­est­ing test be­cause a for­eign-to-for­eign sale should re­ally make no dif­fer­ence. It is not fall­ing out of lo­cal hands.

Aus­tralian agri­cul­ture is cry­ing out for in­vest­ment to build its po­ten­tial to cash in on the tsunami of Asian de­mand for food and fi­bre.

For­eign com­pa­nies, such as Terra Firma, have shown they are will­ing to in­vest and im­prove the farms they buy here.

Sure, put the ap­pro­pri­ate checks and bal­ances in place to make sure the buy­ers of our big­gest prop­er­ties are in it for the right rea­sons.

But for a coun­try built en­tirely on for­eign in­vest­ment, it’s a bit rich to pick win­ners and losers based on where the buy­ers come from and how they look.

Ed Gan­non is pub­lisher of

The Weekly Times

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