Takeover traces an arc from the colonial era, when “protectionist” and “free-trader” were the primary political hues, to a credible near-future of investment made stateless by bitcoin.
Federation had to overcome the protectionist–free trade divide between Victoria and NSW in an era when “foreign” could mean a neighbouring colony. Protectionism gained the upper hand early on after 1901, yet, writes David Uren, it “coexisted with an open stance on foreign investment throughout the first 70 years of federation”.
He casts an unloving look back over the history of the Australian car industry, with its thicket of tariffs and subsidies (lately rebranded as government “co-investment”), first to keep foreign infiltration in check, then to prop up a doomed enterprise. And all in the service, says Uren, of a nationalistic dream. The closure of the GMH plant in Geelong in 2017 will bring full-circle the pageant of protectionism in Australia, as it was a Geelong flour miller who, 160 years ago, first banged the drum for trade terms favouring “native” industry.
Uren tells how Australia’s “open stance” on foreign investment was narrowed in 1972 by the humble Chiko Roll. When a US conglomerate sought to acquire the makers of the one-handed meal dubbed by Les Carlyon “a boon to weary taxi drivers and losers at the trots”, it suddenly became an unassailable national symbol, a cabbage-filled line in the sand. The decision to reject the takeover went all the way to federal cabinet and led to the passage of the Foreign Acquisitions and Takeovers Act, 1975, which enshrined the nebulous catchphrase, “the national interest”.
This is the crux of Takeover. Uren is economics editor at The Australian, and his narrative is delivered, for the most part, in jog-trot prose straight out of the business pages. But here it picks up pace and passion. Under an OECD treaty the only grounds for restricting foreign investment are “maintenance of public order, health, morals, safety and the protection of essential security interests”. Uren contends that our Foreign Acquisitions Act, and the review board charged with vetting foreign investments, legitimises and amplifies nationalistic viewpoints.
In 1993, John Hewson called for the abolition of the legislative curb on foreign takeovers. Now, says Uren, “nobody on the left, the right or the economic centre wants to let go of the system of vetting foreign investment” – a situation he describes as “a travesty”. FL
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This article was first published in the print edition of The Saturday Paper on Sep 12, 2015 as "David Uren, Takeover". Subscribe here.