Friday, 4 October 2013

Indonesian cattle land purchases in the Top End are quid pro quo

I thought it was a bit odd when not long after the election result was clear and Tony Abbott started to pursue the priorities he'd set out before the poll, that a story about plans for Indonesian companies to purchase Northern Territory cattle properties appeared in the media. Then less than three weeks after the election more stories emerged, with Abbott's Jakarta trip scheduled to go ahead the following week (this week). Now Barnaby Joyce, the agriculture minister who had eretofore been loudly protesting against such sales, has executed a neck-snapping backflip on the issue, and has moved in behind them.

It's been clever maneuvering by the Indonesians. After the Labor government shut down the live cattle trade to Indonesia in June 2011 Northern Territory cattle producers never really recovered as importers kept quotas well below levels that obtained before the crisis. As a result local property prices dropped sharply. In step the Indonesians, wallets in their hands. And with the new interest from Indonesia in purchasing cattle properties, property values will recover.

During his visit to Jakarta, Abbott slammed the previous government over its unilateral move to stop the live trade, in a concession to his hosts that cost him nothing. Now he has brought Joyce into line, allowing him to assign credit for the backflip to Northern Territory cattle producers themselves who, Joyce says, want the sales to go ahead. Of course they do. But it's fascinating to watch Joyce shift so rapidly from the agrarian socialism he has always believed in, to a spot in the limelight situated significantly closer to the main action taking place in the seats reserved for the supporters of big business.

Abbott has for his part moved closer to Julia Gillard's "Asian Century" template. The PM very loudly announced that a bevvy of business people would go with him to Jakarta in an effort to drum up trade between the two countries. Which is how it should be played. There are heaps of business opportunities available in Indonesia for smart Australian companies. Those who complain about the fact that an Indonesian company owning cattle land in the NT would pay no tax on live exports are missing the point. It's short-sighted and parochial to simply equate the national interest with tax receipts. Farmers and those living in rural communities know that foreign investment often brings with it higher levels of capital inflow as new owners work to improve properties in line with their wider business strategies.

Australia relies on foreign investment in so many parts of its economy that it simply could not function at the level its citizens have become accustomed to without it. Beyond this aspect of the case, however, is the simple quid pro quo. If Abbott wants Australian companies to prosper in Indonesia - where the population has now reached 250 million and where the same middle class that asks for Aussie beef commands significant, and growing, discretionary cash - then he has to be willing to allow Indonesian companies to pursue their own best interests on Australian soil. This is how the diplomacy of business works. And I would far rather see the quid pro quo working to the advantage of Australian businesses than merely underpinning Scott Morrison's silly and xenophobic asylum-seeker policies.

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