Business Council statement on Ausgrid transaction process

The Business Council of Australia respects the preliminary decision by the Federal Government to block the lease of New South Wales electricity provider Ausgrid, following advice on national security issues from the Foreign Investment Review Board.

“While we are obviously not privy to the details, we would expect that the FIRB would make this assessment based on firm evidence from relevant agencies, and a commitment to Australia’s security interests,” Business Council Chief Executive Jennifer Westacott said.

“It is now important that the Government make public as much of that advice regarding security concerns as possible, to ensure ongoing confidence in the review process.

“While national security is absolutely critical for the public interest, we note that many SOEs (State Owned Enterprises) already operate in Australia, often with Australian partners and boards, as do many listed foreign companies, such as the Hong Kong-based entity. The electricity assets in question will be subject to lease conditions and a wide array of specific industry and economy-wide regulations including competition law – as indeed should any company operating in Australia.

“More broadly, it is important to remember that throughout our history, foreign investment, particularly foreign direct investment, has been crucial for Australia’s economic growth. It not only brings in much needed capital but also technological expertise and expertise, all of which boosts national productivity and incomes. While there are some risks, these should be, and generally are, managed in a way that ensures Australia reaps net benefits.”

“It is important for New South Wales that the transaction process for Ausgrid now proceed, to realise the clear benefits of more efficient electricity service provision, as has been demonstrated in other States, where privatisation has delivered cheaper electricity for consumers.

“The leasing of Ausgrid will also deliver a revenue boost, and ultimately much needed infrastructure, including schools, hospitals and roads, for the people of NSW.”