Abbott’s foreign investment policy

This is the sentence that makes me feel most uncomfortable:

Voters are likely to be less hostile to foreign investment if they think that the government is preserving a well-balanced economy.

Extract from We are pledged to real reform | The Australian

Most of the Abbott statements about manufacturing assistance, transaction costs and “economic diversity” that trade liberals (including at least one closet liberal) have jumped on are likely nothing more than atmospheric “jawboning”. They’re subject to public review and deliberation, as Abbott himself notes. A competitive political response to significant structural changes in the economy; but, plausibly, window-dressing.

But the FIRB powers to “maintain a well-balanced economy”—whatever that means—are without let or hinderance and un-reviewed. That makes them a real threat, not just atmospherics.

On a more positive side, I was pleasantly surprised by Senator Carr’s reported response to the manufacturing unions’ demands:

“We don’t believe an inquiry is the right approach to ensuring the continuing prosperity to Australian manufacturing,” he said.

“The approach is to look at the policy framework and examine ways in which it can be reviewed.”

Senator Carr said the economy was foisting new challenges on Australian manufacturers that would force the transformation of traditional industries and the creation of new sectors that included new “world-class companies”.

While Senator Carr backed giving Australian manufacturers “fair and reasonable” access to major resource projects, he insisted there would be no retreat to protectionism through means such as mandating local content.

“It’s no good pretending the world is as we once thought it was in the 1950s, as the Libs would have us believe,” he said. “It’s about building for the 21st century.”

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