Treasurer Hockey takes his lead from the King of Bhutan.

The small Himalayan kingdom of Bhutan is famous, in as much as it is, for evaluating all its actions based on the Gross National Happiness.

This morning Australian Treasurer Joe Hockey has taken a lead from Bhutan on rejecting the foreign takeover of GrainCorp by Archer Daniel Midlands. Hockey’s early morning press conference sets out the actions, and reasoning. It sounded like it was carefully scripted in an attempt to cover all the relevant issues, and leave the minimum scope for legal challenge.

In my paraphrasing: Hockey noted this is the first rejection, in 131 applications since he was Treasurer. Hockey adding he viewed permanent conditions as impractical, and unreasonable. That this rejection is occurring at a specific time and market condition and that in future it may well be possible for an “accept” to occur. But the interesting element for rejection was the strong public interest and the anticipated reduction of public support of Foreign Investment.

The logic seems to be 1) It is in the national interest to have foreign investment. 2) FI approvals only take place with public support, or at least public passivity. 3) ADM is sufficiently high profile that an approval will generate public resistance in future. THEREFORE it is in the national interest to reject this foreign investment to ensure further foreign investment.

A difficult decision, and a complex sell. It will be interesting to see how it plays in the broad Australian media, the Australian business media, and in the US business media.

I think Joe has added to the Gross Nationals Happiness.

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