Cabinet split on SPC
Federal cabinet is divided over whether to provide financial assistance to help struggling fruit processor SPC Ardmona. Analysis with James Massola.PT0M0S 620 349
Agriculture minister Barnaby Joyce has vowed to fight for a $25 million lifeline to be thrown to food producer SPC Ardmona in Tony Abbott’s first full cabinet meeting of 2014.
In a position that puts him at odds with Treasurer Joe Hockey and other economic dries around the cabinet table but onside with Industry Minister Ian Macfarlane and Victorian Liberal Sharman Stone, Mr Joyce said he backed the company’s bid for government assistance to help it keep it’s canning operations in the Victorian country town of Shepparton operating.
Treasurer Joe Hockey and Industry Minister Ian Macfarlane in a cabinet meeting on Thursday. The two are at odds over industry assistance to SPC. Photo: Alex Ellinghausen
Mr Joyce told Fairfax Media on Thursday, before the all-day meeting, that his colleagues should not take ''an all or nothing view'' on government assistance, though he stressed he would back whatever position the cabinet ultimately adopted.
Dr Stone is also making a last-ditch plea at the meeting for her party to the funds to keep SPC Ardmona in business. The company is based in the town of Shepparton in her northern Victorian electorate of Murray.
Mr Joyce said: ''It's how you deliver a program, rather than the argument over whether you should have the program.''
Nationals deputy leader Barnaby Joyce says he will fight for assistance for SPC Armonda.
''I'd hope we could negotiate with them [SPC] and say well, if we did this what would you do, what guarantees can you give?
''We are a food producing nation but we can't can a peach [if SPC closes]? Come on.''
Mr Hockey told the ABC's 7.30 on Wednesday night that if the federal government was asking people to live within their means then ''corporate Australia must also follow''.
Local MP Dr Sharman Stone at the SPC Ardmona plant in Shepparton in Victoria. She wants the government to provide $25 million of assistance to keep the factory open. Photo: Ray Sizer
''The parent company of SPC Ardmona, Coca-Cola Amatil, which is an Australian company, in the first six months of this year, had a profit of $215 million, for six months, and yet there is a request for $50 million of taxpayers money,'' he said.
''I think you can understand why we are being very cautious, very careful about handing out taxpayers' money.''
But Dr Stone argues that without the extra funds, the Australian fruit processing industry will die and thousands of jobs with be lost.
''It means no more Australian processed fruits,'' she said. ''That's a tragedy, for the nation, not just for my local area.''
Cabinet appears to be split on the issue, with Mr Macfarlane expected to press the case for investment in SPC in the face of opposition from Mr Hockey
When asked on Thursday if she thought SPC was caught in the middle of an ideological battle between the economic dries and wets of the Liberal Party, Dr Stone she replied: ''I think there's a bit of that.''
Dr Stone noted that Mr Hockey had legitimate concerns about the broader state of the budget – ''If I was Joe, I'd have the same worries'' – but argued an exception should be made for SPC, which is in her electorate.
She said "every cent" of the extra money would go into equipment.
Small Business Minister Bruce Billson said the SPC issue would make for an interesting discussion in cabinet, but did not voice his support for government assistance for the company.
The Victorian minister said he would be "happy to discuss [SPC] in cabinet".
''A profitable business making decisions about its investment strategy, it'll be an interesting discussion'', he told reporters at Canberra airport.
Mr Billson added that he thought there was "some confusion" about what Coca-Cola Amatil had been ''talking about''.
''They’re indicated some appetite for the investment, but whether it meets their own internal profitability and rates of return seems to be the basis of the request for funding,'' he said.
''I know for a lot of the small businesses I represent, they'd love to have a discussion about whether the rates of return they’re earning are adequate or not, they'd just like some discussion.''
Assistance for SPC is the only formal agenda item listed for debate during the cabinet meeting, where senior ministers will debate the government's political agenda for the year.
Coca-Cola Amatil has promised up to $150 million in investment in its facilities in country Victoria if the federal and state governments stump up $25 million each.
Labor industry spokesman Kim Carr described the cabinet meeting as ''D-Day for SPC Ardmona and the thousands of jobs and growers it supports''.
''The Abbott government's indecision, chaos and division on this issue are leaving Shepparton and the region without certainty or stability,'' he said in a statement.
''Mr Abbott has already abandoned automotive manufacturing in Australia and the tens of thousands of jobs it supports, today we will see if he walks away from our food processing industry too.''
Prime Minister Tony Abbott has also signalled his aversion to the SPC bailout.
Asked about the package on Tuesday, the Prime Minister said ''business should get its own house in order rather than seek government assistance''.
This attitude appears to have shifted from his message to the SPC community last May. In a message for an SPC community rally posted on Dr Stone's website, Mr Abbott criticised the Gillard government for ignoring the fruit growers, after the company announced it would halve the amount of produce it would buy.
''This is a government in chaos which is completely disregarding you at a time when they should be standing side by side with you and doing whatever they can to support you,'' he said. But Mr Abbott stopped short of offering industry assistance, pointing to the Coalition's pledge to scrap the carbon tax to ease electricity and gas costs for fruit growers.