Hockey: Not Your Average Joe (25 page)

Joe and Melissa then travelled across the Sydney Harbour Bridge to join Abbott at the Four Seasons hotel in Sydney. Several staffers went along, too. Lovett and his wife, Cheryl, were among them. So were Andrew Burnes and his wife, Cinzia. In a replay of greeting his father an hour earlier, Joe and Abbott didn’t share a word; they just hugged. Six years in the wilderness had ended. They’d felt the elation in 2010, before the Independents robbed them of victory. They’d counted their chickens before they’d hatched last time, and there would be none of that high-fiving this time. ‘It was relief more than anything,’ Joe says now.

‘There was no shaking of champagne,’ Lovett says. ‘It was proud, but it wasn’t cocky. Just relief.’ Joe had a glass of white wine, and as he left he turned to Lovett. ‘I’ll call you in the morning.’

And he did, but not before Joe received his own call at the Four Seasons, where he and Melissa bedded down. It was 8 a.m. when he answered his mobile. ‘Hello, Mr Hockey. It’s the Downing Street switchboard here. I have the Chancellor of the Exchequer on the phone. Are you prepared to speak to him?’

Joe couldn’t help himself. He turned to Melissa. ‘It’s George on the phone. Do you want to have a chat?’

‘George who?’ came the response, before he told her it was George Osborne.

She rolled back over. ‘I’ll leave that one to you.’

TWENTY-TWO

The Abbott government
was barely five weeks old in October 2013 when Joe Hockey found himself sitting in a meeting of G20 finance ministers and central bank governors in Washington. Russia had led the 2013 St Petersburg–based talks, and with the 2014 shindig set to be hosted by Australia in Brisbane, the newly minted treasurer was canvassing the room. Managing Director of the International Monetary Fund Christine Lagarde, Chancellor of the Exchequer George Osborne, and US Secretary of the Treasury Jack Lew stood out immediately. ‘I was pinching myself that I’m there, and I hear this faint mention of Australia, and then there’s silence,’ Joe says. He had been fiddling with the hearing piece that converted the Russian into English but, like a novice, was struggling to find the right channel. Glenn Stevens, the Governor of the Reserve Bank of Australia, was sitting beside him. ‘What’s happening?’ Joe asked him.

‘They want to know what you’re doing with the G20 next year,’ Stevens responded.

Joe didn’t flinch. ‘Australians are blessed with a capacity to deliver straight-talk and I’m instructing my officials that the communiqu
é
should be no longer than two pages,’ he blurted out. A murmured cheer went up around the room.

Joe breathed a sigh of relief, regaining his confidence. ‘We need a world with less tax, less regulation, more enterprise and more freedom,’ he told the representatives.

‘Hear, hear,’ Jim Flaherty, the then Canadian finance minister said.

‘That’s right,’ Osborne agreed.

Not long after the meeting finished, Joe sat staring out the train window as he travelled from Washington to New York. ‘He turned to me,’ Australia’s head of Treasury Martin Parkinson says, ‘and he said the G20 is big, really big, isn’t it?’

Parkinson responded that it was. ‘Joe turned back to looking out the window – that was the point where it really fell into place for him,’ he says.

Joe and Parkinson had come out of the election eyeing each other with a healthy dose of suspicion, but within hours of Joe being installed as treasurer the men found themselves on a flight to Indonesia for an APEC finance ministers’ meeting. Joe says: ‘He explained to me how international diplomacy worked, because I’d never had any experience with it.’

However, Parkinson’s future employment was soon determined when only days later he was sacked by Tony Abbott. Joe only found that out (from Parkinson, not Abbott) later; a move that must surely have challenged the depth of the cigarette paper agreement between prime minister and treasurer. Even so, it didn’t stop a good relationship developing between Joe and Parkinson, who does not leave the post until the end of 2014.

Parkinson says that Joe often started with the view that too many meetings were talk-fests without outcomes, and that his role had been to encourage Joe to value the ‘relationship building’ that meetings presented, as much as the results that might flow. Joe listened to every bit of advice he offered, but constantly demanded a rationale. Joe admits he would have liked Parkinson to stay on in the job, but Abbott had made up his mind. ‘It’s a prime ministerial appointment,’ Joe says.

Upon election, Joe’s immediate focus had been on the domestic front, particularly addressing the ‘budget emergency’ his party had campaigned on. But other issues jumped the queue, including whether GrainCorp could be taken over by US food processing giant Archer Daniels Midland (ADM). A string of other rulings – on General Motors, Qantas and SPC – were also building, threatening to blister the love delivered by voters on election day. ‘Inevitably, it’s often the unforeseen issues that will define a new government,’ Joe says. And that would prove to be the case, but the G20, once seen as a Kevin Rudd nerd party for his home city of Brisbane, was now being heralded as the centrepiece for Joe Hockey’s first year as treasurer.

It was in anticipation of the G20 finance ministers meeting that Joe, in February 2014, hosted a soiree at his Hunters Hill home for a select group of local and international finance figureheads and senior MPs. As gourmet canapés were being handed around the room, Christine Lagarde, who a few months earlier had been in the Washington audience with Joe, was sitting at the piano in his children’s playroom while his six-year old daughter, Adelaide, tried out her beginner’s French. In the next room, Joe and Melissa were mixing with their guests – Malcolm and Lucy Turnbull, Mathias Cormann, Arthur Sinodinos, Steven Ciobo, Martin Parkinson, Westpac Group CEO Gail Kelly, and Telstra chair Catherine Livingstone. Over a dinner of barramundi, kipfler spuds, braised fennel, smoked black caviar and verjuice cream, the group talked about finance, and the casual Australian way of life. Three times during the course of the evening Lagarde politely batted off questions about whether she would run as French president.

A couple of days later, Joe led the G20 finance ministers and central bankers on a Sydney Harbour cruise, ending with a Matt Moran barbecue at Admiralty House, where Abbott and Kelly had so much fun they literally kicked off their shoes. There, political and business glitterati, such as Macquarie Bank’s Nicholas Moore, ANZ’s Michael Smith, Wesfarmers’ Richard Goyder, the Business Council of Australia’s Jennifer Westacott and Tony Shepherd, and BG Group chair Catherine Tanna, were mixing with a couple of small-business owners, such as John Sharpe, the owner and founder of Riverlife in Brisbane, and Priyanka Rao, from Luxmy Furniture in Sydney’s Punchbowl. With the Qantas children’s choir and a picture-perfect Sydney Harbour in the background, the night topped off a successful five-day meeting; the next day’s two-page communiqu
é
stated an ‘aim to lift our collective GDP by more than 2 per cent above the trajectory implied by current policies over the coming years’.

Joe had been able to draw key figures to Australia, and the sassiness of this G20 finance meeting – the relaxed atmosphere where the talks with French Finance Minister Pierre Moscovici occurred over a cigar in a courtyard at the Sofitel and where the Admiralty House function was a stand-up barbecue – was at his instigation, raising the eyebrows of security and protocol officers, and some in Treasury. And while the hard yards on the communiqu
é
– and nominating a growth figure – had been done in the lead-up by bureaucrats, the bilateral meetings also required plenty of diplomacy.

It was 72-year-old Dr Wolfgang Sch
ä
uble, Germany’s finance minister in the second and third Merkel cabinets, who held out on allowing a specific growth target. He didn’t want to sign up to something that he had no control or influence over, and questioned the merit of nominating an aspirational 2 per cent. He was won over by labelling the extra growth rate as an ‘aim’.

Bilateral discussions with China also required some diplomacy, after representatives were very direct in asking Joe to make foreign ownership in Australia more accessible. Sources claim the representatives even cited a company China was interested in buying.

Joe was just as quick with his reply. ‘You can’t ask of us what you won’t do for us, in return,’ he told them.

The G20 finance ministers and central bank governors’ meeting marked a pause in a string of controversial decisions made by the Abbott government in its first six months, the trickiest of which, without doubt, was the bid by ADM to take over GrainCorp. Joe’s decision to reject the bid has been widely painted as an example of the Liberals kow-towing to their junior partner, the Nationals, who were hell-bent on stopping it. But behind the scenes there was a lot more going on.

Inside the offices of JP Morgan in New York City, Joe was addressing a group of businessmen at a function involving the American Australian Association. As Treasurer, he was selling the government’s wares, explaining where it sat and where it was heading. The questions were predictable: on the G20, then immigration, then Australia’s four pillars bank policy. And then the one he had been waiting for: on agricultural acquisitions by foreigners. The big American food processing giant ADM, having already launched its takeover bid for GrainCorp, seemed to follow him everywhere he went during his trip to the US. Pleas for meetings with ADM had come through the Australian consulate, and had been raised at business meetings. On one occasion, Joe’s chief-of-staff, Grant Lovett, was even asked on the street whether his boss would meet with ADM. It seemed to Joe that ADM had an uncanny knowledge of his appointment calendar. While he had expected a question on it at JP Morgan, he was nonetheless irritated. Foreign investment, he told the audience, would be approved when it was not contrary to the national interest.

A decision had been taken inside Joe’s office soon after the 7 September election that Joe wouldn’t engage with external groups in making his decision over the controversial takeover bid. When he had left Australia the decision was still charged with emotion. Australians, by and large, had an open-for-business attitude to foreigners, but this one was sticking in their craw, with city communities backing their bush cousins and appealing to Joe to reject the proposal. Joe didn’t want to meet with ADM because he knew he would then need to meet with the National Farmers’ Federation. That would lead to meetings with other lobby groups and organisations with a vested interest. He didn’t need that. All the facts were in his in-tray, and the Foreign Investment Review Board (FIRB) was also preparing a report for him. But now, as the question-and-answer session at JP Morgan’s was winding up, it became clear that the young man who had questioned Joe was not mollified by his answer. As Joe made his way to the lift, the man began to badger him. Lovett heard it from a side room. ‘He was literally harassing him,’ Lovett says.

Joe says: ‘I was mightily pissed off.’

When Joe said he wouldn’t be bullied over GrainCorp, it was widely read as a message to his Coalition partners, the Nationals, whose rural constituencies were opposed to it and who were fighting publicly and hard to convince the treasurer to reject the bid. But, in fact, those comments were directed equally at ADM, the company Joe believed was using strong-arm tactics and demanding to get its way in Australia. Joe’s take is supported by Parkinson. ADM knew every meeting Joe, Lovett and Parkinson had in New York, and they were orchestrating lobbying by every CEO. ‘How did they know about the meeting I was at?’ Joe says.

After taking the reins of the Treasury, the ADM decision sat front-and-centre on Joe’s desk. It signalled an interesting and unexpected start. He had become treasurer to fix a budget crisis, to dismantle the carbon tax and to honour an election pledge to stop government waste. But, almost immediately, his attention was turned in a different direction and he was dragged into hard economic decisions wrapped in an emotional heart: ADM’s takeover of GrainCorp, Holden’s decision to leave Australia, and demands for help from both Qantas and fruit grower SPC Ardmona. All of them were extremely nuanced. All involving iconic companies. All decisions in which Australian voters had a real stake.

From the start, Joe felt uneasy about the ADM takeover bid. Two lessons relating to foreign investment came back to mind. The first was during the HIH crisis when, as financial regulation minister, Joe had tried to rope insurer Allianz in to assist. He got the message from the foreign-based headquarters of Allianz that the company wasn’t keen to help. It was happy to do business in Australia, but not happy to help out locally when asked. The other lesson was in Australia’s gold trade. In the 1990s, the big investment banks became very busy trading gold. A consequence of that, as Joe had learnt from Melissa, was that most major gold companies ended up in the hands of foreigners. Those companies then took their trading operations offshore, and closed up shop in Australia, taking the jobs servicing the gold industry with them. Although both those lessons were minor in the scheme of things now, Joe had not forgotten them. His gut instinct was to support foreign investment applications because he believed Australia should be more open for business, but the motivation for the bid would always be the first question he asked.

The way FIRB applications work is this: the treasurer has a 30-day period to disprove the application otherwise, it goes ahead. In reality, a decision is rarely made that quickly, and the bidder will withdraw the submission and re-apply to allow more time. But there is also a process where the treasurer can issue an interim order. If that occurs, a decision needs to be made within 90 days; it cannot be extended. Joe chose the latter path, determining that a decision about GrainCorp would be made by 17 December 2013. He did that for a couple of reasons, the first being that the issue was at the centre of divisive community debate and needed an end date irrespective of what decision was made. Second, it allowed him to quickly own a key decision and show he was prepared to make a tough call, which in this case would either anger ADM and undoubtedly cause job losses in Australia or anger a big chunk of the Australian community, who believed this was another example of putting the nation up for fire-sale. But Joe’s decision to issue an interim order certainly raised some eyebrows around the Cabinet table, including in the office of Prime Minister Tony Abbott.

‘What are you doing?’ Abbott asked his treasurer down the phone line. Joe was unequivocal because he knew foreign investment decisions were his to make. ‘Blame me. If I’m wrong, I’ll take responsibility for it,’ Joe told him.

Joe drew up a long list of questions, demanding they be answered by Lovett, Treasury and the FIRB. As that went on behind closed doors, community feeling grew, particularly the sentiment that ADM’s takeover would amount to another example of selling off an Aussie icon.

On one afternoon, Joe was at home when Tony Cook, the owner of Clarence Street Cycles in Sydney, delivered a couple of bikes that Joe and Melissa had bought for their children. Cook’s brother was a wheat farmer in Queensland, he explained to Joe. ‘You should ring him – he has some strong views on GrainCorp,’ he said.

‘He’s delivering kids bikes and he asks me to ring his brother,’ Joe says. It was like a line in the sand. It was dividing the Party and the community.