Treasurer Scott Morrison has approved the $280 million sale of Australia’s largest dairy farming business to the Chinese-owned Moon Lake Investments.
Morrison announced he had agreed to the acquisition of the land and assets of the Tasmanian Land Company (TLC), including the Van Diemen’s Land Company (VDL) from New Zealand’s New Plymouth District Council (NPDC), subject to conditions on taxation.
He said his decision was consistent with the recommendation of the Foreign Investment Review Board.
Moon Lake is owned by Lu Xianfeng. Lu is the managing director and executive chairman of Kresta Holdings Limited, Australia’s largest window-covering retailer.
VDL, which dates from 1825, owns and operates 25 dairy farms in Tasmania, milking some 18,000 cows. The Treasurer pointed out that “VDL is currently a foreign-owned company that has always been owned by foreign residents”.
Morrison said he had considered the national interest test, including the likely impact on local jobs and increased investment to support economic growth. “In particular, the national interest test requires consideration of the impact on taxation revenue,” he said.
Approval of Moon Lake’s application is the first under new conditions, requiring it to comply with Australian tax law, Australian Taxation Office (ATO) directions to provide information about the investment and to advise the ATO if it enters into any transactions with non-residents to which the transfer pricing or any anti-avoidance measures in the tax law might potentially apply.
Morrison said Moon Lake had guaranteed all VDL employees would be offered jobs on terms no less favourable than their present ones.
It had also committed to investment projects on the VDL farms “which will provide additional economic activity to the Tasmanian economy, and based upon Moon Lake’s estimates will result in a near doubling of employment at VDL”, Morrison said. “This will guarantee more than 140 local jobs, generate an intended additional investment of over $100 million and an expected additional 95 jobs.”
Moon Lake planned to continue to supply the milk under the present contractual terms. This meant the supply of milk and milk products would not be affected – indeed supply might increase with more investment, Morrison said.
He said the VDL land had important cultural and natural heritage significance.
“Moon Lake has committed to honour the terms of all environmental and cultural agreements entered into by VDL, including with the local Aboriginal community. This also includes the ‘in principle’ approval for the construction of a Devil Proof Fence at its Woolnorth property to help reduce the spread of Devil Facial Tumour Disease among the Tasmanian Devil population,” Morrison said.
Businessman Dick Smith condemned the approval as a “disaster”. “You may as well not have borders if you are going to sell everything off,” Smith said.
The decision follows controversy about the purchase and comes before Morrison must decide on whether to approve the sale of the pared-down Kidman empire to a Chinese buyer. Earlier he rejected the Kidman sale particularly on the security grounds that Anna Creek Station, the biggest working cattle station in the world, overlapped the Woomera Prohibited Area. Anna Creek has been removed from the restructured bid.
Authors: The Conversation Contributor