19 August 2013
The following article appeared as an opinion piece in Queensland Country Life on 17 August 2013.
If the Coalition is successful at the upcoming election, a major policy area that needs to be urgently addressed is the significant undermining of foreign investment potential by the actions of the Labor Government.
At a time when Australia is desperate for inbound investment to bolster flagging productivity and address the torpor of infrastructure and resource development, Labor has been seemingly hell bent on introducing a formerly unknown risk factor into investors’ consideration: sovereign risk.
One of the major factors ostensibly in our favour has been the stable, democratic society in which we live. Foreign entities could derive great confidence from the fact that funds invested here were safe, corruption was virtually non-existent and investors were not subject to capricious, irrational and ill-considered government decisions.
Australia’s standing in the international investment community has been eroded due to a number of factors. However, high profile efforts such as the handling of the negotiations (or lack of negotiations) with the mining industry regarding the Resource Super Profits Tax, the scuppering of the Abel Tasman super trawler and the nobbling of the live export trade, have done little to build confidence.
Unsurprisingly, Euromoney Country Risk ratings reveal that there has been a marked increase in sovereign risk since the Rudd/Gillard governments took the helm from John Howard. The ratings reveal that sovereign risk was relatively steady until the change in government, from which point there has been an 11% decline in investor confidence.
Ministers Burke and Ludwig, the architects of the super trawler and live export debacles, must have skipped reading the CliffsNotes on effective government and clearly fell under the mesmeric charms of extreme, activist lobby groups.
Whilst these groups will frequently claim that they have a big presence with significant backing from the wider population, the reality is that their confected outrage and ‘rant du jour’ antics are as genuine as a Kevin Rudd smile.
The problem with giving credence to these groups and the Twitterati, is that they are the domain of the wilfully blind, and all notions of rational consideration left the building with Elvis. Mainstream concepts such as the rule of law and economic prosperity are irrelevant in the cloistered world in which they inhabit.
The new weapons of these activist lobby groups is a well-orchestrated social media program, which will inevitably include a carpet bombing campaign of MPs email accounts. This ‘campaign mail’ is spam, ephemera – pure and simple. Politicians need to learn that if someone does not feel compelled to pen a unique message in relation to a particular concern, it should be dealt with in the same click and flick manner that it was sent to them, and consigned to the deleted items bin.
An example of this slacktivist mentality was encapsulated perfectly in the Kony 2012 campaign video, which outlined the crimes of African warlord Joseph Kony. The video was subsequently ranked by TIME Magazine as the most viral video of all time, but the online crusade had the staying power of Australia’s top order and faded from consciousness almost immediately.
I am not suggesting that these ‘flash point’ issues are to be ignored, rather the concerns of these lobby groups must be dealt with in a common sense way and on their merits, without fear or favour, rather than following the hyper-inflated rhetoric that is the specialty of these activists.
No one is suggesting that we are heading down the road of Zimbabwe or Putin’s Russia, but governing does not mean pandering to those groups that make the most noise.
Policy consideration should always start with a concentration on the wider macroeconomic implications, rather than focus group polling and management of the media cycle. As the 1992 Clinton election slogan so deftly declared, ‘It's called the economy, stupid’ and it needs to be treated with respect, rather than as a footnote to poor policy.
The flight of capital from the Australian economy and the decline of our manufacturing sector is clearly cause for major concern. The fact that it has been facilitated, in part, by the actions of the Federal Labor government defies comprehension.
The parable of the little Dutch boy, who stuck his finger in the leaking dyke, would lose its message if the boy knew that the people he was trying to save were busy drilling holes on the other side. Abbott has a choice in these fickle economic times – does he want to be remembered as a dam builder or dam buster? Either way, the Labor legacy he will inherit is completely damned.
About McCullough Robertson
McCullough Robertson is a leading Australian independent law firm with industry specialists combining legal expertise with deep industry knowledge and foresight. The firm provides innovative, relevant and commercial legal solutions to major corporate, government and high net worth individuals across Australia and internationally. Established in 1926 the firm’s major focus areas are the resources (mining and energy), food and agribusiness, technology, telecommunications, health and life sciences (pharmaceuticals), real estate and financial services sectors.
Trent Thorne is an agribusiness lawyer with McCullough Robertson Lawyers. He has previously worked as a jackeroo on a vast NT cattle property (Wave Hill Station) and has family members with deep ties to the cattle industry.
For more information contact Trent Thorne on +61 7 3233 8845 or email@example.com. Twitter: @agintegrity
This article covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.