QUEENSLAND'S ASSETS HEADED OFFSHORE

Written on the 15 October 2010

QUEENSLAND'S ASSETS HEADED OFFSHORE

THE state’s prized assets are potentially heading overseas into foreign ownership and Queenslanders would be none the wiser.

The company that paid $603 million for Forestry Queensland in June is the US-based Hancock Timber Resource Group.

Press reports at the time suggested the company was Queensland-owned under the banner Hancock Queensland Plantations.

But the company is based in Boston, Massachusetts in the US. It manages more than two million hectares of timberlands worth around $9.7 billion across the US, Brazil, Canada, New Zealand and Australia.

While Treasurer Andrew Fraser has confirmed the Government will lease the Port of Brisbane, the Abbott Point coal terminal and Queensland Motorways, a source close to Brisbane Business News, says talks have been held with potential buyers offshore.

“We actively marketed our capabilities in relation to acting on sales of this nature and not only looking in Australia to potential persons of interest, but internationally as well given the calibre of the assets. There was definitely interest from Asian clients,” says the source.

State Opposition Leader John Paul Langbroek was not aware that Hancock was a US-owned company – nor did he see merit in the debate.

“I have no views about foreign ownership, in a free market economy we can’t nationalise the assets,” he says.

But Langbroek says if the LNP were to be elected, it would not sell off Queensland assets.

“If it’s not for sale, we won’t sell it. These assets don’t belong to the Premier and her ministers, they belong to Queenslanders,” he says.

A spokesperson for Trade Queensland says foreign direct investment (FDI) served two crucial roles for economic development.

“First, as FDI inflow brings new capital investment, it enhances production capacities within the economy thereby stimulating future economic growth,” says a spokesperson.

“Second, the greatest contribution of FDI may come through technology transfer which can stimulate export growth, improve total factor productivity and help integrate into global economic networks.

“It is due to these critical roles played by FDI that most economies globally design policy measures to facilitate access to and attract new foreign capital.

“The degree of foreign ownership on Queensland’s companies should therefore provide positive flow-on-effects on the economy. However, it is difficult to quantify the magnitude of these positive effects on trade for any particular company or investor.”

Meanwhile the largest float to list on the ASX since Telstra, Queensland Rail, is at full tilt. The success of the $7 billion privatisation stage one phase will not be known until November when a clear indication of the take-up can be valued.


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