Business leaders warn on ADM bid

The incoming coalition government has been warned by business leaders that any effort to block the $3 billion bid by Archer Daniels Midland (ADM) for GrainCorp Ltd would discourage future foreign investment, according to The Australian Financial Review.

The bid has faced stiff resistance from growers and some from some political circles, and the timing of the federal government's decision on whether to accept the bid coincides with the earliest days of the coalition government, when investors and offshore businesses will be looking for clues about how the new government will approach foreign investment.

“The government is going to have to go out of its way to make sure the world knows that the policy is being run centrally and is not being run from the margin,” investment banker and former government adviser Mark Johnson told the AFR.

“A pretty enlightened and open policy towards foreign investment is fundamental to that.”

Qantas Airways chairman and former Rio Tinto Ltd chief executive Leigh Clifford said he hoped the new coalition government would lead a “more mature” debate on foreign investment than the previous Labor government, the AFR added.  

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Anonymous,

Absolute rubbish.

Bad management; bad Government policy; failure to grasp at grassroots problems eg. farmgate price of foods; wage costs; huge importing of food that is; so-called managers and management asset stripping companies for their own gains; failure to maintain assets are fabulous excuses to say we should flog off our assets.

Instead of investing; reinvesting in ourselves.

I am sick to death of excuses; starting from why the cricket team (and rugby) is not winning through to this limp-wristed excuse to "find investors".

They are NOT INVESTORS. They are bailing out Australian Companies because WE are not/cannot manage/set policy/fix our own problems.

Time to change .................. also flogging of (bailing out) our property investments with our cash-flows going overseas.

What a bunch of losers. What a bunch of excuse makers.

Anonymous,

So Johnson thinks that the serfs might be getting ideas above their station. Given the contempt of Big Mining for planning, employment of locals, its economic and social impact, the minimal domestic return, the increase in east Coast gas prices, tax subsidies, and such as Ferguson and Gray desperate to sell us out, why, I wonder, is that not surprising?

“Need foreign capital”? Well, where it introduces new methods and equipment, certainly. But does any of it really do that?

Any purported insufficiency of local capital is a fraud, of course, intended to stifle any movement to regulate foreign investment according to any reasonable cost-benefit test.

Reality - the actual level and, more importantly, mis-use of domestic savings by ignorant, greedy, and wasteful financiers - is simply irrelevant to the economic fundamentalist ideologues. Unavailability of finance for domestic business expansion due to financier preference for speculation is simply not discussed in polite society.

Mis-use and waste of the vast ($1.4t) superannuation pool ($3 trillion within 10 years ) is another example. Yet one of the justifications for privatisation of the pension - superannuation - was the source of investment that it would create.

That by what passes for Australia’s investors has long been yet another long-standing market failure was shown by a study from the 1990s by the NIEIR's Dr Peter Brain entitled “Financing the development of the manufacturing sector” in which the NIEIR put a strong case for the establishment of a Manufacturing Investment Bank due to the unavailability of local capital (especially after the Commonwealth Development Bank was destroyed).