FIRB a pawn in Treasurer Frydenberg’s games

Ill-considered games: Treasurer Josh Frydenberg. Picture: Jane Dempster

Treasurer Josh Frydenberg fails to understand the importance of transparency in takeover regulation, including Foreign Investment Review Board decisions, as evidenced by the prerelease of the Bellamy’s decision.

The selective media placement of the conditional FIRB approval for China Mengniu Dairy Company’s $1.5 billion takeover of Bellamy’s does nothing for either Frydenberg or, more importantly, FIRB’s reputation.

Ultimately FIRB decisions are political matters and this one was a highly political decision, given China’s involvement.

READ MORE: Joyce laments ‘another piece of Australia sold’ | FIRB approves Bellamy’s takeover | Bid for Bellamy’s sweet enough, say analysts

Politicians like to use the media to test ideas or gain extra prominence for news which may ordinarily be on the back pages, but they should draw a line when it comes to regulatory matters.

The Treasurer made the same mistake earlier this year when he had photos published of him sitting, smiling, with Reserve Bank chief Phillip Lowe, attached to reports the central bank was backing government policy.

A mistake: Josh Frydenberg’s photo opportunity with RBA boss Philip Lowe. Picture: David Geraghty.

Lowe had previously made the eminently sensible comment that it was time for fiscal policy to share the load in an attempting to boost the economy.

This is a belief Lowe and many others still hold, so attempts by Frydenberg to suggest the bank was backing the government were not a good look.

The RBA’s independence is backed by its statutory power.

FIRB decisions are ultimately recommendations to the Treasurer, but its credibility would be enhanced by transparent treatment from the government rather than selective leaks as part of the political game.

Leaks sometimes come with the implied promise that they will receive uncritical coverage.

In this case the government made the right call on Bellamy’s, so no games were necessary.

The FIRB’s credibility suffers enough from lack of consistency, but to be a pawn in the Treasurer’s ill-considered games is a step too far.