Article – Hockey warms to Indonesia bid to buy chunk of cattle country

21 September 2013
Peter Alford
The Australian
JOE Hockey is sympathetic to Indonesia’s proposal to buy control of up to 1.5 million hectares of northern Australian cattle country to help secure its beef supplies.
The Treasurer said the specific proposal was not raised during his discussions with Indonesian counterpart Chatib Basri at this week’s Asia-Pacific Economic Co-operation forum finance ministers meeting.
“But I was very encouraged that in my discussions with the Indonesian Finance Minister it was recognised that there was mutual benefit in expanding the cattle trade between Australia and Indonesia,” Mr Hockey said yesterday.
“And we want to work closely together to expand and facilitate the export of food from Australia to Indonesia, to meet Indonesia’s growing needs.”   Mr Hockey, the first minister from the Abbott government to hold official talks in Indonesia, and before Tony Abbott’s visit to Jakarta at the end of the month, said they evidenced “a genuine depth of sincere engagement”.
The tight focus of attention on Mr Abbott’s visit will be whether he can reconcile the Indonesians’ hostility towards key aspects of his anti-boatpeople policy. However, the Treasurer insisted: “There is great warmth towards Australia and the new government from the Indonesian government, there is no doubt about that.”   He cited, from the Basri meeting, Indonesia’s enthusiasm for an agreement to expand an interchange scheme involving Australian Treasury and Indonesian Finance Ministry officials swapping places, and for placing Indonesian officials in Australian state treasuries to become more familiar with infrastructure funding.
Australia has taken a lead role in the establishment of an APEC public-private partnership office in Jakarta, which Mr Hockey said the Prime Minister would expand upon during the APEC leaders’ summit in Bali early next month.
The Treasurer’s measured but supportive attitude towards Indonesia’s interest in the northern Australian pastoral industry stands in contrast to senior Nationals MP Barnaby Joyce’s lambasting of the proposal last week, before he was named Agriculture Minister, as being against Australia’s national interests and calling for a public outcry to Canberra to foil it.
Indonesia’s State Enterprises Minister Dahlan Iklan has confirmed two state-owned companies were actively seeking opportunities to buy majority stakes in established northern pastoral interests, targeting investments totalling between one million and 1.5 million hectares.
If the transactions required Foreign Investment Review Board clearance, Mr Hockey as Treasurer would be the final arbiter.
Under the current rules that is not likely, because the probable size of the investment — $40m to $50m — would fall below the current threshold for FIRB scrutiny of agricultural land and agribusiness acquisitions.
The Coalition has canvassed reducing the $248 million threshold requiring FIRB clearance to $53m for agribusinesses and land purchases of more than $15m, and any agricultural land acquisition by foreign state-owned enterprises, as is the Indonesian proposal.
Since being sworn in as Agriculture Minister, Mr Joyce has moderated his comments on foreign investment but other Nationals MPs are still voicing concern.
NSW senator John Williams said the Coalition government needed to distinguish more carefully between genuine foreign investments, such as the Ord River scheme, and the outright foreign ownership of Australian land and agribusiness where there was no consequent boost to the local economy and where the profits of farming moved offshore.
Former agriculture spokesman John Cobb, who lost the portfolio to Mr Joyce, called for “flexibility” on foreign investment.
Courtesy of The Australian