Trahaison des clercs

What­ev­er your views on the mer­its of the SGX/ASX deal—I’m scep­ti­cal of the durable val­ue, but there is a rash of glob­al con­sol­i­da­tion in that industry—do you agree with me that it is mad­ness to install a tri­bunal of bureau­crats at the door to the Aus­tralian invest­ment­mar­ket exact­ing an obscure toll on for­eign firms such as SGX, keen to invest in our growth?.

The SGX has been in talks with Australia’s For­eign Invest­ment Review Board for months but is not expect­ed to lodge its for­mal sub­mis­sion for sev­er­al weeks, allow­ing for changes in its deal with the ASX to be incor­po­rat­ed. Once reviewed, the reg­u­la­tor will make a rec­om­men­da­tion on the SGX/ASX pro­pos­al to Wayne Swan, Australia’s trea­sur­er, who can veto any deal.” Extract from FT.com — SGX unveils con­ces­sions on ASX deal

We’ll nev­er know what terms the FIRB impos­es because they nev­er answer to the pub­lic for their pub­lic trust. We don’t know even their objec­tives.**

Do we believe that these bureau­crats can some­how see the future? If not, why do we allow them to stip­u­late the terms of entry to our investment/services mar­ket? We’d be hor­ri­fied if a com­mit­tee of clerks at the ports decid­ed who was, or might become under their tute­lage, a prop­er per­son to buy or sell our shoes or ships or seal­ing-wax. Is an invest­ment transaction—the key to buy­ing and sell­ing per­haps half of all inter­na­tion­al­ly trad­ed services—so dif­fer­ent?

Can any Trea­sur­er or his advi­sors pre­tend, as FIRB does, to bind the future behav­iour of firms enter­ing our mar­ket? Don’t we have laws, Courts and exec­u­tive agen­cies that con­trol actu­al behav­iour in accor­dance with objec­tive stan­dards of evi­dence? Equal­ly for domes­tic and for­eign investors?

What costs do these invest­ment “bounc­ers” impose on Aus­tralian equi­ty own­ers? Since they do not report their stip­u­la­tions how can we mea­sure their impact? Where is the evi­dence that FIRB does any­thing to add to our wel­fare?

** The ellip­ti­cal doc­u­ment that counts as FIRB’s inter­pre­ta­tion of their del­e­gat­ed pow­ers under the 1975 For­eign Acqui­si­tions and Takeovers Act—a law from the Whit­lam-era that pre-dates the glob­al­ized, com­pet­i­tive Aus­tralian economy—offers no clar­i­ty on the “nation­al inter­est” test. They are bound nei­ther by statute nor by com­mon law prin­ci­ples of fair­ness nor even by their own prece­dents. It’s a dis­grace to prin­ci­ples of trans­par­ent gov­er­nance of mar­kets.

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