Rinehart warns of collapse in investment

by 15 November 2017

The Australian Financial Review
14 November 2017

By Brad Thompson 

Gina Rinehart has warned of a collapse in mining and other investment in Australia unless there are fundamental changes to the country’s three-tiered system of government to reduce the burden of bureaucracy.

Australia’s richest woman called for an end to jurisdictional duplication across federal, state and local governments in delivering a bleak assessment of the country’s direction under the current crop of political leaders and bureaucrats.

Signalling her willingness to take a wider leadership role in public debate and policy-making, Mrs Rinehart she found it “difficult to do nothing” even if it made her unpopular in some circles.

Mrs Rinehart opened up about what motivated her to take a public stand in the countdown to National Agriculture Day and National Mining and Related Industries Day, November 21 and 22.

“I find it difficult to do nothing when I see the country I was brought up in, deeply loved by my family before me, heading for unnecessary problems,” she said.

“(Problems) caused by overspending governments, creating record debt, ever-increasing in size and power, governments with ever-increasing government regulations and (red) tape, which are causing poor investment levels in our country today, and which have serious consequences for the future of Australians and our country.

“I know in certain areas this is unpopular, but I hope it tries to explain why I do what I do, irrespective of popularity, but based on very genuine concern.”

Mrs Rinehart said that while multinationals could turn their backs on Australia, it was something she would never do as chairman of Hancock Prospecting and not an option for most working families.

“It’s not easy to uplift jobs and families and start from scratch in other countries if Australia continues its problematic path,” she said.

“I believe the better route is to try to help get our country back on a better, more responsible path where people can confidently believe that the living standards they enjoy can be maintained or rise, that they’ll be industry and businesses able to provide from profits, revenue to pay for our defence, our police, maintaining or improving our infrastructure, providing for our growing proportion of elderly, our hospitals, parks, kindergartens and more.

“Governments need to scrap jurisdictional duplication across federal, state and territory and local governments in all forms of legislation and regulation. This approach includes removing duplication across departments within the same government. This would substantially reduce the amount of red tape business and the community needs to deal with.”

Hancock Prospecting’s torturous path through more than 4000 pieces of red tape in developing the $10 billion Roy Hill iron ore mine in the Pilbara is well documented.

Roy Hill, 70 per cent owned by Hancock Prospecting, recorded a maiden profit of $331 million in 2016-17 and employed close to 1400 people.

It is typical of projects which earn revenue, create jobs and generate taxes that Mrs Rinehart believes are being stymied by governments.

The 63-year-old hit out at government malaise from the perspective of paying more tax than any other Australian. Hancock Prospecting paid almost $700 million in taxes in 2016-17, up from $191 million the previous year. Net profit was $1.07 billion 2016-17, up from $443 million, and revenue increased by 160 per cent to $4.45 billion.

Heartened by widespread support for National Agriculture Day from peak industry groups, farmers, businesses and politicians, Mrs Rinehart appealed for the same level of support for National Mining Day to regain ground with the general public.

“I believe there is a large and growing disconnect between those who know … that mining and related sectors make a huge contribution to our country, and those who do not,” she said.

She said the mining industry had to step up to celebrate the industry and to explain the consequences of diminished investment.

National Mining and Related Industries Day was launched in 2013 and is held on November 22 each year.

A black tie dinner in Sydney will mark the occasion this year, but it hasn’t gained anything like the broad support of the new National Agriculture Day. Hancock Prospecting is a major backer of both events.

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