Gina Rinehart has produced a poor-hard-done-by video, which screams hypocrisy, hypobolic, guilt by association and “poising the well” arguments as much as stupidity.
It is mind-boggling that she can whine about the tax placed on profiteering on common goods, but then to state that “without mining and mining related industries, this country has no hope of repaying our record debt”.
Something that would be made more difficult quite obviously, if we continue to allow such industries to make such massive profits on resources that belong to the country without due return.
I won’t bother saying much on her continual slugs at the “carbon tax” except to repeat; it is not a tax. A tax is income-based. This is charged per unit. It’s a price, not a tax and it provides market based incentive to decarbonise economic activity. More here. Of course, Rinehart isn’t really well known for her concern for anthropogenic climate change, so no surprises for her comments.
Her push for the northern development and how it “has the potential to develop beyond our imagination” is based entirely upon imagination. All I need for evidence of this is that provided from ecology. Why is it largely open savannah or open dry land apart from a few coastal regions? It’s a hard land, with old, nutrient deficient soils and strong seasonal fluctuations.
The reason most people settled along the east and southern coasts and not the north is because of the climate and fertility of the regions compared to the north. Sure, there may be resources that Gina could exploit, but it will come with increased cost in shipping in essential resources and to provide increased water security and flood prevention (ie. think about the wet season). You cannot make a food bowl out of the north unless you plan to strip the remaining few forests and wetlands, which are the only places where fertile lands exist up there.
However, what really annoyed me was her complaining about the high wages in Australia. Late last year, she took this point further;
“…west African competitors can offer our biggest customers and average capital cost for a tonne of iron ore that’s a hundred dollars under the price offered by an emerging producer in the Pilborough [Western Australia]. Furthermore African’s want to work and it’s workers are willing to work for less than two dollars a day. Such statistics make me worry for [Australia’s] future…” (8mins in)
Clearly she feels Aussie workers expect too much… Shame to her profits I guess…
Yet, she misses a number of major factors. Firstly, an African can buy more with the equivalent AUS$2 in their country and an Aussie can here at home for the same AUS$2. The expectations of the Aussie consumer to fork out more for an item is far greater. Only recently was it in the news that the IT industry marks up their products here seemly only because Aussies can pay extra for it.
Aussies demand higher wages because profiteers squeeze them harder for the contents of their bank accounts. High Aussie wages is caused by private industry, so it’s interesting when someone from private industry complains about it as a hindering overhead.
Furthermore, I would argue Gina mustn’t have a very good business model. Think about it. Her Aussie workers demand higher wages than African workers. The infrastructure required to develop her projects in remote northern locations is a big overhead, due to lack of people silly enough to live in such regions (no wonder she pushes for the government to develop the north – it would surely save her a healthy quid). Not to mention that there is obvious justification for sharing a slice of the profits with the commonwealth, seeing as it is due to common goods and Aussies are not stupid enough to overlook this.
In short, mining is clearly not globally competitive in Australia. Yet, Gina plays the hard-done-by; “I choose to mine here when I could make more money elsewhere, because I care. But you guys are mean to me!”
Such minerals will not go anyway if Gina doesn’t extract them all as soon as possible. Maybe future generations could make a healthier return from them in a global market where the local costs are not so comparatively high…?
No, Gina, mining industries are not simply ATM’s and yes, mining industries deserve what they have earned from their efforts. However, this is due to wealth within the crust of Australia. It is made on the wealth of Australia and not simply your investment.
There has to be something seriously wrong with anyone willing to be spoon-fed such industry hype.