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Sovereign Debt, Sovereign Risk
AUSBUY has been a lone voice for over 18 years in identifying problems when foreign ownership takes over our wealth creating assets. Global companies make decisions which suit them first, not Australia. But when a country wants to buy our assets including our land we have real sovereign risk.
For decades we have seen the loss of our local businesses to foreign takeover. Each time Australia loses. But a bigger problem is emerging as we pretend that we have survived the global financial crisis.
There is a difference between a country and a business buying our assets. A country will make decisions in its own national interests (not necessarily Australia’s) with assets it owns no matter where they are located, whereas a business will make decisions based on commercial reasons which may not suit Australia.
In the current climate the problems are compounding. Our trading partners have never been benign, but when a company disguises that it is owned by its government we need to be very wary regarding what assets they are allowed to buy.
The Foreign Investment Review Board should consider the consequences to Australia’s long term sovereignty when making decisions about a country buying our assets, albeit in the disguise of a business whose policy is controlled by foreign political interest.
Here are current examples of loss of wealth creating assets and threats to our sovereignty. As we write this article Fosters (Proudly Australian since 1864) has been set up for demerger because of the low returns on its wine business.
Both its brewery and wine businesses are up for sale. In addition, recently the Australian Competition & Consumer Commission gave CSR permission for demerger of its sugar and building businesses. The problem is that when accountants say a business is in trouble their solution is demerger, and companies are broken up and sold off.
Both these companies own land assets here and source from our farmers. Both companies supply the community with everyday food, beverage or building products. At this time the Chinese owned companies Bright Foods and Tsingtao Brewery are eyeing Fosters, and Bright Foods the sugar assets of CSR. These companies represent their government. This means another country can own our assets and our land. This is against the national interests of Australia and our sovereign rights as a nation.
In addition, Cubbie Station is in discussion with the Arab Emirates to sell this asset. Cubbie grows cotton in southern Queensland and uses vast supplies of water that could otherwise be used down stream by southern state farmers. Again this is not a company, but a nation potentially buying our land assets.
It is not in our interests to allow sovereign states to buy our assets. These Australian companies hold assets important to our strategic security and our capacity to feed ourselves. If these sales occur they can potentially override our sovereign rights. These threats need to be bought to the attention of all Australians. Our governments, whether Federal or State, do not have the right to sell our sovereignty to the highest bidder.
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