AUSTRALIAN agriculture will continue to co-exist with mining satisfactorily, if common sense prevails.
But the sovereign risk posed by blocking foreign backed mining projects in Australia due to spurious environmental claims years into the investment phase, is a “big problem” says federal Trade and Investment Minister Andrew Robb.
“I think farming and mining and energy have coexisted for a long time now and will continue to,” he said at the National Press Club in Canberra yesterday.
“Of course there has to be common sense and recognition of (preventing) wanton destruction of prime agricultural land and all that sort of thing; that's an obvious one.
“But, they (mining and agriculture) can, common sense prevailing, coexist very satisfactorily.”
During his Press Club address, Mr Robb attacked key issues around the Abbott government’s move to complete Free Trade Agreements and boost agricultural exports to key markets.
He spoke passionately about opportunities to grow the transforming national economy through liberalised trade, to help create local jobs and enhance future prosperity.
But he also warned about potentially negative financial impacts caused by the current union campaign to try and thwart formal ratification of the FTA between China and Australia.
Mr Robb said failure to ratify the ChAFTA would cost the red meat industry $100 million, dairy up to $60m, wine up to $50m and grains more than $43m as tariffs remained in place.
He said Australia was also deep into negotiations with India for a Comprehensive Economic Cooperation Agreement that they aimed to conclude by the year’s end.
“India wants to deepen the relationship because it needs access to secure and reliable sources of minerals, energy and food to fuel its growth and lift 300 million Indians out of economic and energy poverty,” he said.
But Mr Robb said the recent decision to overturn approval for Indian company Adani’s large mining project in Queensland was hindering the India trade negotiations.
“Green groups are not making our job any easier,” he said.
Mr Robb said the reason for recently blocking the mine was not the substance of environmental outcomes but “lawfare” brought about by activist groups “for whom the skink is simply a patsy”.
He said the reptiles in question were the subject of specific conditions already in the mining project’s environmental approval but opponents had challenged it on “narrow procedural grounds”.
“So all of the approvals have been done over a long period of time and they’ve come back on a technicality,” he said.
Mr Robb accused green groups of wanting to kill the mining project “because they don’t like fossil fuels”.
He said they also had access to literally unlimited funds from green international groups “who are dictating things that are happening in our country, without us having the opportunity to influence those decisions”.
“This is a US$7 billion project at the moment which will grow to $21b and is expected to generate more than 8000 jobs during construction and over 5000 permanent jobs during the 100 year life of the mine,” he said.
“It’s ready now to go except for these legal challenges which have taken place.
“Here we have the largest Indian investor in Australia – a company that’s invested nearly $3b in Australia so far, followed our rules in a very patient manner over the past seven years, and now have prior approvals overturned on a technicality.
“You think that’s not going to change India’s appetite to get an agreement with Australia this year?
“It makes it all the more difficult.”
Mr Robb also expressed similar frustration about the sovereign risks attached to green groups stymying other high profile mining projects like the Chinese backed Shenhua Watermark open cut coal mine on the Liverpool Plains in NSW.
“It is a big problem in my view as the investment minister,” he said.
But Mr Robb said Australia’s environmental credentials were one of the great attractions to investors into Australia and “they have been for a long time”.
“There may be a fairly rigorous process to go through but they (foreign investors) feel once they’ve gone through all of the hoops, that they have a great deal of certainty,” he said.
“The project lasts another 40 years and then there’s not going to be a misappropriation of their project.
“One of the big selling points has been the rigor of our environmental procedures and it is one of our big sale points, from an investment point of view.”
Mr Robb said investors in the Adani project “have shown the patience” as had Shenhua’s backers for the past seven or eight years.
But he said since 2007, a two year delay in approving a $30 billion plus energy project had equated to about $40m a month in added up-front costs.
“We have got a real problem,” he said.
“India will be influenced by what’s happening to the Adani project.
“They’ve done all of the right things etcetera etcetera and now they’ve been blindsided by a technicality and so you end up with uncertainty and sovereign risk and we’ve got to deal with it.”
A more attractive investment destination
Mr Robb said Australia had to be made into a more attractive destination for investment, “in a way we haven’t had to do for many a year”.
“That's why, as Australia's first ever investment Minister, another attraction to taking on this job, I’ve spent as much time listening to our major investors as I’ve spent in meetings with my overseas trade counterparts,” he said.
“I have conducted 67 investment round tables across 27 countries in the last 18 months.
“We have attracted private sector expertise into Austrade in five investment priority areas of food, agribusiness, resources and energy, tourism infrastructure, economic infrastructure and advanced manufacturing and services and technology.”
Mr Robb said the prospects on offer in Australia’s region meant there was “great cause for optimism about the future”.
“Without doubt the global centre of economic gravity is moving closer and closer to us; in this sense we are blessed by our geography,” he said.
“Opportunity will be increasingly driven by the surge from 600 million people in the middle class to more than three billion people - from India through to China and all the countries in between.
“Not in 100 years not in 50 years but expected in the next 35 years.
“And the point is it is already happening – the deep frustration for me is that I don’t see, across a lot of business, the recognition of what is happening and the opportunities that are there.
“There is a complacency if nothing else, which I think is holding us back.
“It is happening now – two years ago 60,000 tonnes of meat was sold to China from Australia they were out 12th biggest market the highest they’d ever been.
“Last year 260,000 tonnes of meat was sold to China from Australia – the became our third biggest market - from 12th or third in one year.”
Mr Robb said the nation was “at a bit of a cross road” on free trade and called for bipartisan support.
“There is a narrow window of opportunity to grab market share among the exploding middle class in the region around us, to lock in prosperity for decades to come; and this explains the urgency we have placed on our task as a government,” he said.
“I suspect that in 2025 – if I had the privilege to come back here again to mark the 10th anniversary of ChAFTA – we would see that these three free trade agreements, and particularly our agreement with China, will have proven to be an economic policy change as profound and beneficial as the opening up of Australia in the 1980’s following the float of the dollar – something that echoes down through the decades.
“We are all the better for this opening up and embrace of the economic dynamism within Australia.
“Australians have benefited from 24 years of uninterrupted economic growth because the opening up of Australia has been a bipartisan issue.”