By Business editor Peter Ryan
Treasurer Joe Hockey has delayed a final decision on a controversial bid by the US agricultural giant Archer Daniels Midland for Australia’s Graincorp.
In a statement released this afternoon, Mr Hockey said the deadline for a decision on the $3 billion proposal had been extended to December 17.
Mr Hockey’s decision is seen as the government’s first major policy test of foreign investment amid pre-election speculation about revised guidelines for the Foreign Investment Review Board.
“Given the size of this transaction and the complex nature of the issues involved, I have decided to extend the statutory time period,” Mr Hockey said.
“This will allow sufficient time for the new government to carefully consider all the relevant issues and advice from the Foreign Investment Review Board before making a decision.”
A decision on ADM’s bid for Graincorp had been expected earlier this year but was put on hold when the Labor government moved into caretaker mode before the election.
Today Mr Hockey used powers under the Foreign Acquisitions and Takeovers Act to extend the deliberation period.
“Australia’s foreign investment review framework allows the Government to examine foreign investment applications on a case-by-case basis to ensure they are not contrary to Australia’s national interest,” Mr Hockey said.
ADM's grain division president Ian Pinner has been in Australia recently to lobby shareholders, including farmers, to approve the deal.
Mr Pinner has been working to dismiss concerns that the takeover could restrict access to grain storage and ports.
"Open access and arrangements that exist today will, and, I believe, need to exist going forward," Mr Pinner told the “AM” program in June.
"We've spent a lot of time talking to the stakeholders of GrainCorp to ensure that we've got what we believe is the right strategy once we acquire the business," he said.
While in Opposition, the leader of the National Party, Warren Truss, urged the Foreign Investment Review Board to veto the takeover.
Mr Truss has said the deal is not in Australia's national interests as it could see most of Australia's export facilities become foreign owned.
"It makes no sense for us to restrict access to the growers or to the trade to either the up country storage or to the ports," Mr Truss told the ABC earlier this year.
Mr Hockey’s decision reflects the attitude of the previous Labor government and reiterates that the government welcomes foreign investment “because of the benefits that it provides to the Australian economy.”