Blog

Cut the Red Tape and Make W.A. Great

by 16 January 2017

From: John Samuel
Sent: Friday, 9 December 2016 10:18 AM
Subject: Fwd: Cut the Red Tape & Make WA Great.

At the shonky builders meeting on Sunday, the Labor Party told the audience they would have an inquiry that would take 12 months and then issue a report. They would make no comment about SAT. Mark McGowan told an economic business meeting yesterday he was going to move a few departments around or together. Nothing about slashing the “red tape nightmare”. A bit like moving the deck chairs on the Titanic.

God will have no mercy on us if his circus gets control of the State.

Julie Matheson on the other hand told the meeting she would “shut these shonky red tape agencies and quango’s down immediately”. That received a rousing response from the crowd. Everyone, consumers, business etc. are angry at being shafted by apparatchiks and shysters.

I highly recommend Julie Matheson as a competent and urgently needed revolutionary and pioneer. Time waits for no man.

Regards,

John Samuel

Kidman head office welcomes first visit from new Chairman Mrs. Rinehart

by 16 January 2017

With the completion of the sale of S. Kidman & Co, new principal owner and Chairman, Mrs. Gina Rinehart, made her first visit to the Kidman Adelaide head office. A warm welcome by management staff was followed by an executive briefing, meeting of all staff and morning tea where Mrs. Rinehart was presented with a Kidman branding iron. The visit concluded in the afternoon with Mrs. Rinehart and her executives attending the annual Kidman staff Christmas party.

Mrs Gina Rinehart, Executive Chairman, Hancock Prospecting Group: “It’s exciting to be at the Kidman Adelaide head office, the headquarters of such an iconic company. It’s been 18 months of uncertainty for the staff and I hope they are pleased they now have more certainty and a majority owner who values the Kidman legacy. And one who is proud of the fact that Sir Sidney and my grandfather, James Nicholas, were long term friends and business partners. I look forward to working with the team in Adelaide and the managers on the stations to understand their ideas to build the Kidman business and continually improve our quality and competitiveness. I’m especially looking forward, weather permitting, to my first visit to the Kidman stations, in January.”

Garry Korte, CEO, Hancock Prospecting Pty Ltd: “Mrs Rinehart brings a new dimension to Kidman with not only an increase in Australian ownership, but also her desire to invest in the future. We now have an opportunity to build the leading cattle business in Australia. Her executives are very excited by the challenges and opportunity ahead.”

Tad Watroba, Executive Director, Hancock Prospecting Pty Ltd: “The Hancock board has been and is supportive of the Kidman purchase, and appreciates that the growth and diversity of the joint Kidman and Hancock herds will provide critical mass guaranteeing both supply and quality to underpin valuable export brands. As an Australian company, we are also pleased that our investment has been welcomed, indeed our investment means that Kidman will now have greater Australian ownership than it did prior to its sale.”

Greg Campbell, Managing Director, S. Kidman & Co: “It’s been almost 100 years since Mrs. Rinehart’s family, her grandfather, James Nicholas, and Sidney Kidman owned businesses together. I, like the rest of the staff have been looking forward to meeting and welcoming Mrs. Rinehart, another iconic Australian, on her very first visit to the Kidman Adelaide office.”

Approval of S. Kidman & Co. Limited sale to increase Australian ownership

by 4 January 2017

9 December 2016

Today I have approved a proposal for the sale of S. Kidman & Co. Limited (Kidman) that will increase the level of Australian ownership of the Kidman group of properties.

Under the proposal the largest station in the Kidman group, Anna Creek and its outstation The Peake, will be acquired by the Williams Family, a local farming family with properties that adjoin Anna Creek.

The remainder of the S. Kidman and Co. Limited business will be acquired by Australian Outback Beef Pty Ltd (Outback Beef). Outback Beef is majority owned 67 per cent by Hancock Beef Pty Ltd (Hancock), with a minority interest of 33 per cent held by Shanghai CRED Real Estate Stock Co. Ltd (Shanghai CRED).

Under the proposal Australian-owned Hancock will control the Board, and will control day-today operation of the business. Kidman will remain majority Australian owned under this proposal, and remain an Australian incorporated company headquartered in South Australia. Existing environmental and other commitments will continue to be honoured.

Outback Beef has made a commitment of significant investments into the Kidman business. Outback Beef will increase herd size by 20,000 head of cattle over the next 18 months. Outback Beef has indicated it will invest up to $19 million in capital improvements to increase efficiency and carrying capacity. Importantly this investment will also achieve the creation of 35 new fulltime permanent jobs by June 2018 while also employing many more new contractors and short terms specialists. This increased employment will be met by engaging local populations as far as possible, including Indigenous employees.

Currently Kidman is 33.9 per cent foreign owned. With the sale of Anna Creek and The Peake, the proposal I am approving today represents a significant increase in overall Australian ownership from 66.1 per cent to 74.7 per cent.

Consistent with the recommendation from the Foreign Investment Review Board (FIRB), I have decided that the acquisition of Kidman as proposed would not be contrary to the national interest and will be permitted to proceed as proposed.

The proposal will be subject to standard taxation conditions. Any future changes in ownership, including any increase in interest by Shanghai CRED, will require subsequent FIRB and Treasurer approval.

The sale process has been extensive and heavily scrutinised, and afforded ample opportunity for Australian bidders to participate. Over the process as a whole, Kidman has spoken with over 600 potential bidders, and over 30 bids were received.

Kidman is Australia’s largest private land owner and holds approximately 1.3 per cent of Australia’s total land area, and 2.5 per cent of Australia’s agricultural land. Of this, 99.8 per cent of Kidman land is held under leasehold arrangements. It has 10 cattle stations, including properties across regional South Australia, Western Australia, the Northern Territory and Queensland covering 101,411 square kilometres and managing a long-term average herd of 185,000 cattle. This is a significantly larger than the next biggest rural landholding in the country.

Previous security concerns that influenced my earlier rejections of sale proposals have been mitigated by excision of Anna Creek, the largest single property holding in Australia part of which is located in the Woomera Prohibited Area (WPA) in South Australia, from the proposed sale to Outback Beef.

Australia welcomes foreign investment where it is consistent with our national interests.

Foreign investment has underpinned the development of our nation and we must continue to attract the strong inflows of foreign capital that our economy requires. Without it, Australia’s output, employment and standard of living would all be lower.

Foreign investment rules facilitate such investment while giving assurance to the community that the investment is being made in a way which ensures that Australia’s national interest is protected.

Under the Foreign Acquisitions and Takeovers Act 1975, all foreign investment applications are examined against Australia’s national interest. This test comprises a range of factors including: the impact of the proposal on the Australian economy and community; national security; consistency with other government policies including tax; competition; and the character of the investor.

We will continue to welcome and support foreign investment that is not contrary to our national interest.

Treasurer’s Media Release

Speech by Mrs Gina Rinehart Delivered by Sophie Mirabella National Mining & Related Industries Day 22 November 2016, Melbourne

by 12 December 2016

Good evening distinguished guests and friends

It is great to celebrate with you in Melbourne tonight the 4th annual National Mining & Related Industries Day.

Thank you very much to John and the whole IPA team for putting on tonight’s special dinner. Thank you to Gabriella and the AusIMM Women in Mining Network also for helping with tonight’s gala dinner.

Today is the day to pose a question for all Australians to consider: “Where would our nation be without the mining industry?”

Who would be paying more taxes, to support our defence, police, roads, airports, elderly, health, recreation and more, without the mining industry?

Today is a national day to celebrate the enormous importance and contribution of our mining and related industries.

Today is a day to cheer on all those who work in these industries, and to remind those in the mining industry to be proud of the industry, and to stand up for it constantly.

It is a day to remind our political leaders and media of how much more difficult things would be if it weren’t for the contribution of our mining industry, and the many related industries that require the sustainability of the mining industry.

It is also a day to better understand the basics required to continue the benefits from these important industries, industries other nations wish they could have.

We are an industry that is at the forefront underpinning Australia’s prosperity and living standards.

We are an industry that not only contributes significantly to national and state taxation revenues, but one that is innovative and one that provides opportunities to many.

Let’s be encouraged to speak up for, and defend, our industry.

The mining industry accounts for around 60 per cent of all exports.

Without mining you wouldn’t have the 35 different minerals available that make up your mobile phone.

Imagine that, a world without phones, and iPads, and computers.

Please Look around this room, this city and every other Australian city.

They wouldn’t and couldn’t be the same without the mining and related industries.

Our industry has also built large parts of Australia.

We have brought investment, opportunities, infrastructure, city conveniences and jobs into some of the most remote and in-need places in our great country.

In some remote centres, 50 per cent of total employment is in mining.

At our own expense, we build towns, villages, roads, sporting facilities, swimming pools, shops, community facilities, rail lines, seaports, airports and many other items of infrastructure.

Moreover, while much of Australia is talking about the technology revolution, the mining industry is actually doing something about it.

Automatic trucks, automated rail, and remote operations centres have moved from the realm of Star Wars to the practical day-to-day.

Drones are now a part of the engineers and surveyor’s toolkit, and deep analytics and data lakes are used in everyday business improvement projects.

This revolution is continuing, and will create new high tech jobs and catalyse new Australian innovation initiatives.

If this isn’t enough, let’s not forget that mining and its related industries also ensured that Australia survived the Global Financial Crisis (GFC) relatively unscathed.

Mining companies paid around $25 billion in royalties and taxes in the 2013–14 financial year alone.

My own private family company is Australia’s biggest private taxpayer, and our tax, just like the rest of those paid by the mining industry, helps to fund vital government services, our hospitals and health care centres, the defence of our nation, our police, our roads, the care of our elderly and those who are unable to look after themselves.

And more.

How many other industries have done as much, for as long as our mining industry has?

The media at times pressure politicians to spend more taxpayer’s money, and politicians in turn often succumb to this and announce greater expenditure, and our record debt increases.

But the focus seems to have been lost regarding creating the revenue to pay for increased expenditure, creating a good environment for investment and for enabling export industries to be cost competitive internationally, given so many expensive government burdens.

Is it any wonder that investment in Australia is now the lowest it’s been since the Whitlam years?

Our government now has to borrow more money just to be able to pay the interest costs of previously borrowed money.

For Australia to prosper it needs investment to be encouraged with good policies, less government tape and lower government taxes and costs, and, Australia needs our mining and related industries, and all our export industries.

But our government seems to be out of touch, in around 2 years of commodity price cuts, and many calls to reduce government red tape and other government burdens, what have they actually done to cut government burdens to enable us to still be internationally competitive?

There’s no ‘buy Australian’ campaign that will induce our trading partners to purchase our products if it costs more than competing nations.

There is no place for government intervention in the commodities export market, but our international customers will buy our products if they remain cost competitive, and reliable.

As an export-orientated nation, with a relatively small population, our prosperity and high living standards depend on our ability to export competitively and sell our goods overseas.

Fundamental to international competitiveness is low government regulation burdens, low taxation and other government expense.

We somehow need to get our government to understand, despite its members usually not from a business or mining related background, that we can’t tax our way to prosperity, and the government needs to be more financially responsible, and needs to spend less and reduce our record national debt, instead of being induced by media to spend more.

I recently visited Washington D.C., where I had the pleasure of listening to and meeting various members of Trump’s campaign team, including former New York City mayor, Rudy Giuliani, and Trump’s campaign manager Kellyanne Conway.

Trump and his team won this election because they listened to the people of America, despite the significant problem of constant and unrelenting negative coverage of the President-elect, including at times his loyal supporters, such as his wife, in attempts to upset the focus of the President-elect.

People close to the President-elect and his campaign advised that their countrymen told them they wanted, firstly less government tape, secondly less taxation, and for the USA to grow and be economically strong again, and provide more sustainable jobs.

And how exciting, this is exactly what the President-elect, and his team, are advising.

They want to deliver for America and its struggling economy.

In addition to wanting to deliver secure borders, a safer country and less government debt. Trumps team members advised that the President-elect wants to cut federal government tape by 50 per cent in his first months of office, and that he wants to cut company tax to 15 per cent.

What a kick-start to the American economy that will provide!

If only we were hearing similar policies from our own government.

We need to let our government know this would be good for Australians too. Instead of continuing along the path of the Greece example, that being, increasing irresponsible government expenditure and debt, to the ultimate detriment of the people of Greece.

Unfortunately for Australia, government regulation and red tape is one of our biggest industries…and its growing!

Decades of regulations piled upon regulations with little thought as to how this would impact business and indeed, the economy and living standards.

To attempt to illustrate just how bad Australia’s red-tape problem is, the Institute of Public Affairs (IPA), and I’m so glad that many IPA members are here tonight, estimates that red tape costs the Australian economy $176 billion annually.

Who can really tell that it’s not even higher?

That’s a staggering 11 per cent of GDP.

The IPA also estimates that under the Gillard and Rudd Governments, an astounding 444 bureaucratic government bodies were established in Australia, of which 198 are engaged in imposing regulations on different industries.

It gets worse. In a ranking by the World Economic Forum of the burden of government tape on companies, Australia is ranked 80th out of 140 countries.

Imagine the difference if the time and money spent on bureaucratic tape and compliance had been able to be channelled into productive outcomes instead.

With over 700,000 Australians unemployed and more underemployed, and our record national debt, the question must be asked – how can we afford this?

Yet earlier this year, and astounding to many, a wild orchid stopped the building of a gold mine in the small Victorian town of Talbot.

Now I like orchids as much as anyone but this particular plant was growing 7 kilometres away from the proposed mine!

Not only was there a 7km buffer zone, but the mine developers were even asked to pay $900,000 to the state government to remove grass because an orchid may grow there in the future.

It’s probably the world’s most expensive possible bouquet!

Having just completed the Roy Hill project, my company’s $10 billion mega-mine in the Pilbara, I have experienced firsthand the impact excessive regulation places on new projects.

The journey to build this mine was a mammoth one from acquiring the tenements in 1993 after BHP dropped them after their years of exploration, finding little of value, to Hancock later exploring and finding iron ore bodies of size and value, to, after considerable work, high risk investment and many government and other obstacles, then celebrating the first shipment of ore in December 2015.

How many approvals, permits and licences do you think we had to complete before construction even commenced?

I asked this question of one former Australian Prime Minister who guessed “about 40.”

But it wasn’t 40, or 50, or 100 or 1000. It wasn’t even 2000 or 3000.

There were more than 4000 pieces of red tape we had to deal with before we could even start to build. More than 4000!

And then more for construction.

What small company can pay for all that?

How many people would dedicate high risk money, years of effort and undertake a project knowing that it would require over 4000 pieces of regulation to be complied with before any prospect of being able to start construction, and go through even more tape, approvals, permits, licences and compliance before producing income.

For a project like Roy Hill, that has contributed to employing approximately 50,000 people in the Australasian region and one that will pay billions in various forms of taxation whilst providing decades of opportunities for many, is it really in the best interests of Australians to burden and delay such projects with thousands of approvals, permits and licences?

In a little under three weeks on 10 December, Roy Hill will mark its one-year anniversary from first shipment, after a very aggressive construction timetable.

It is currently completing a very aggressive ramp up to achieve early next year 55 Mtpa, to become the largest single iron ore mine in Australia.

It is telling that during this period there have been no other major mining projects opened in Australia and who can honestly say, Australia’s lack of encouragement to investment, it’s onerous government tape, and high taxation, with threats from time to time of even higher taxation, had nothing to do with that?

Despite mining companies usually having mines in tough outback areas, having to deal with poisonous snakes, mosquitos, flies; battle the very high temperatures, dust, drought, fires, floods and earthquakes, their biggest challenge was complying with government regulation.

The University of Sydney’s Faculty of Law recently reported that the fastest growing sector for new graduate lawyers was “in compliance services” – in other words, helping companies comply with government regulation.

Now that’s something that should alarm us all.

Red tape is not something that we can’t change, governments can act to reduce it.

Other countries have done this with great success, such as our neighbour Singapore, and currently India.

As a country, we need to reassess our priorities, and as an industry, we need to work harder to make our case better understood and heard, especially when it comes to taxation.

Australia has the fourth highest company tax rate (for large businesses) out of the OECD countries, up there with Greece, Portugal and Belgium, who’s economies are hardly the models of success.

The Tax Foundation also found that Australia’s 30% corporate tax rate is above the world average of 22.38%, and higher than that of other countries in the Asian region whose average corporate tax rate is 20.86%.

Even the UK, where my company recently acquired a stake in a future Polyhalite mine, have a company tax rate well below ours of 20 per cent, and it is scheduled to further decrease to 17 per cent by 2020.

Additionally, recent proposals in West Australia to increase the tax burden on iron ore mining are misplaced and very concerning.

The situation is this: the Australian iron ore industry already has the second biggest tax burden in the world.

On average, Australia’s two biggest miners Rio Tinto and BHP Billiton pay $19 per tonne of iron ore produced and extra on top of that, as Currently proposed in West Australia, would see Australia become the highest taxing jurisdiction for iron ore in the entire world.

Rio Tinto have publicly called this West Australia threat the biggest threat to their iron ore mining business that they face anywhere in the world.

This new tax if introduced would also cost many jobs in both mining and related industries.

As I outlined at the start of my speech, the mining industry has done so much for Australia over decades, it and its related industries contribute billions and billions to the economy and create opportunities and jobs for millions.

The mining industry cannot however be the governments perpetual ATM or cash cow.

Our industry has to compete internationally or lose its markets.

We are continually targeted and told to give more and more money to solve political problems we didn’t cause or create.

It wasn’t the mining industry that created our record national government debt of more than $450 billion.

It’s the next generation who will be left to pay this off, with an increasing elderly proportion of people requiring more health services and support.

Employees in our industry including related industries need to become more vocal and diffuse the perception, “hit mining and all of our problems as a country will be solved,” or sadly the consequences will see less jobs in our industry and related industries.

As Winston Churchill so eloquently said “for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Reductions in government spending and policies to encourage investment such as less government tape, and less taxes and less other government expense, which in turn will lead to stronger economic growth, like America after its President-elect takes office, will help to grow the economy and help to pay back this debt.

Higher taxes, are not the answer to pay off this debt.

Australian’s for Northern Development and Economic Vision (ANDEV), is a group I founded of concerned Australians who advocate lower taxes, and less red tape to enable investment and development, similar to the IPA.

We advocate for special economic zones to be set up in the North to encourage investment to develop this remote area.

Special economic zones would help to build more towns and businesses in our North and would provide more infrastructure, more amenities for people in the outback, new opportunities and employment.

Special economic zones operate successfully in many parts of the world and they can operate successfully here too.

I encourage everyone here tonight to visit www.andev-project.org and get involved in defending and supporting your industry.

Ultimately, mining is one of our country’s most significant and necessary industries.

Whether it’s the watch you’re wearing on your wrist, the jewellery you’re wearing, or the iPhone that you’ve checked a few times tonight, mining is essential.

I am so pleased that we have a day to celebrate mining’s importance and recognise its incredible stories and history, and I wish everyone, a Happy Mining & Related Industries Day! Thank you.

Gina Rinehart Quote on the U.S. President-Elect

by 10 December 2016

“The president-elect wants to cut federal red tape by 50% in his first months of office, and to cut company tax to 15%. What a kickstart to the American economy that will provide.”

- Mining magnate Gina Rinehart calls for Donald Trump-style tax cuts in Australia.

Address by Mrs Gina Rinehart to the International Women’s Federation of Commerce and Industry’s Global Women’s Trade Summit

by 7 November 2016

26 October 2016
Mrs. Gina Rinehart

“The little recognised requirements of growth centres, can Australia become a growth centre of the world?”

Good morning distinguished guests and all delegates,

Greetings from the Roy Hill berths at Port Hedland. As you can see we have 2 ships in harbour, one almost loaded which will go out tonight and the other which we’re about to start loading which you can see is high in the water.

May I welcome delegates who have travelled from near and far to be here today.

I am delighted to be asked to present the opening address and wish Diana and team and all delegates an interesting and enjoyable summit.

Thank you very much for awarding me with the inaugural Federation Star Award which recognises leading role models for women. I am deeply honoured and very delighted to be the inaugural recipient.

May I start by reflecting on some of the history and the then culture of Victoria, which enabled the living standards we enjoy here today, and which billions of people in this world, deprived of such culture and growth, are not as fortunate to enjoy.

My favourite Victorian books, The Billabong Series, were written by, Mary Grant Bruce, capture the history here and the then culture very well. The story is set in Victoria, with some glimpses elsewhere given the war history, but primarily in the Victorian rural areas, and the series takes us from pre world wars, through to the end of World War 1 and into World War 2.

These books featured Norah and her family as the main characters.

Norah was fortunate to have a very good father, a man of integrity, a patriotic Australian, one who led by example, hard work, sacrifice, gave a helping hand to his mates in need, or others going through very hard times, was responsible, strong and able to cope with the many challenges that life on a then remote cattle property threw up. One who didn’t look after his family based on handouts, and had no sense of entitlement. Who didn’t expect the government to control his life. Rather, very much do for yourself, or, do without.

This and the at times toughness of outback life helped Norah and her brother Jim develop a set of values and the culture that initially built Victoria – the value of hard work, independence, decency, perseverance, love of country and resilience. A culture that respected hard work, and people achieving from that, be it from scratch, or from building upon what their parents may have started, providing jobs for others.

Yes, this was a book series, but it also well portrayed the then Victorian, indeed, Australian way of life and what grew our country and enabled the living standards we enjoy today. A culture still of relevance and importance, should Australia truly wish to become a growth centre.

These values and culture are vital as we as a nation currently face many difficulties, albeit mainly selfimposed: including but not only, record and growing debt, where we can’t even pay the interest without borrowing more to do so, increasing regulation, approvals, permits, licences and compliance, and what should be unsurprising, declining investment, now the lowest it’s been since the low investment that marked the socialist government during the Whitlam years.

Our Asian neighbours can’t understand us, despite our large land mass, abundance of natural resources, educated population, friendly neighbours and relative political stability, we are not a growth centre like other countries such as Singapore, who are without the benefits of our natural resources and land.

To become a growth centre of the world, we need to realign our attitude to what it takes to encourage investment into our country, and better understand that this would bring the associated benefits of sustainable employment, rising living standards and greater international recognition. We can’t do this without attracting investment.

Of course, an essential pillar to attracting investment and becoming an international growth centre is to significantly reduce the amount of red tape and government burdens, permits, approvals, licences and compliance.

The Institute of Public Affairs (IPA), one of Australia’s think tanks, wrote recently of a Melbourne café wanting to invest more, and employ more people, Crate Speciality Coffee café.

They applied to local government to increase the café’s seating and trading hours, in response to customer requests.

This application would have created more jobs, but was knocked back by local government due to just one single anonymous objection. Let me give you another red tape example in central Victoria.

Earlier this year, and astounding to many, a wild orchid stopped the building of a gold mine in the small town of Talbot.

And how close was the culprit plant growing to the proposed goldmine? 7 kilometres away – nowhere near the proposed mine!

Not only was there a 7km buffer zone, but to be permitted to get this investment and growth happening, the three miners were asked to pay $900,000 to the state government to remove grass because an orchid may grow there in the future.

Do we need countless government regulations to invest in and build projects such as this, or, do we need to ensure investment and growth like used to happen to enable our country to grow and enable the living standards we enjoy today?

Victoria is not the only place being hampered by government tape – our entire country is. Concerningly, the Consolidated Pastoral Company, a large agricultural business that operates 19 cattle stations across Australia, estimated that it has to comply with more than 300 pieces of government regulation and red tape. For an industry that is so essential to our country’s prosperity and future, should governments be increasing the number of regulatory burdens?

Much earlier in my life, back in the mid-sixties, I can well remember the excitement of achievement that investment in the Pilbara created to build a new railway, port, port town, mine and mine town, all in just 22 months.

An achievement that built more roads in the Pilbara, brought schools and hospitals to the Pilbara, recreation facilities, shops, chemists, hairdressers, yes, very exciting to locals who’d lived decades on stations without such facilities, even police stations and post offices were built and provided by private investment. This could never happen in Australia today in 22 months. Those who suffer unemployment and underemployment issues such as women and young people, need to know that the currently onerous level of government regulations, etc. prevents them from getting jobs or choice of jobs when they graduate school or university, and during their later life.

Businesses will simply not invest and employ if their costs and risks are too high and likely to increase, due to demands from out-of-touch government.

Take Roy Hill for example, our company’s $10 billion mega-mine in the Pilbara. How many approvals, permits and licences do you think we had to complete before construction even commenced?

50? 200? 2000? 3000? Or even 40 as a former Australian Prime Minister guessed?

No, more than 4000 pieces of red tape had to be undertaken even prior to construction. More than 4000! And more for construction.

What small company can pay for all that? Our governments are creating the circumstances where some industries become out of reach of small businesses. Yet small businesses are the backbone of Australia, and the largest single employer. Is it really helping us to become a future growth centre to effectively cut out small businesses in some areas, and instead hope to rely on multinationals?

You may like to know that Roy Hill employs a slightly higher percentage of women than others in the Pilbara and in the West Australian mining industry. I’m very happy to be told by women employees, that our culture is better than other mining companies they’d experienced. And I’m very happy to be told, that despite mining being unpopular and almost a dirty word in parts of Australia, by women working at Roy Hill, that they love to do so, and remain proud of their industry, despite the knockers.

Sometimes the industry is knocked by people who don’t really understand aspects of it, I’ve heard that people in the east think the Pilbara has become a giant quarry that stretches for hundreds of miles. I hope those who may have this impression, fly over the Pilbara for themselves. You can see from the air, what relative pin pricks these scattered non adjoining mines are, they do not form a giant quarry stretching hundreds of miles, but they are important to employment, opportunities for related businesses, paying some of the government debt, that otherwise would likely see even higher taxes, providing facilities in the bush, that people in the outback would otherwise have to go without, revenue that contributes to our defence, police, elderly and health care and more. Indeed, the mining industry helps to maintain the living standards our country currently enjoys.

Some years ago, when Ian Macfarlane was the Federal Resources Minister, a detailed survey was taken measuring the size of land that car parks at hotels take up, and mines take up, they were similar in size, yet we don’t hear an outcry about the car parks at hotels, do we?

Few companies are taking the risks to develop mega projects due to Australia’s high costs and excessive government burdens, and unfortunately for Australia, have moved their investment offshore.

To attempt to illustrate how bad Australia’s red-tape problem is, the IPA estimates that red tape costs the Australian economy approximately $176 billion annually. Who knows all that has been lost, the cost could be astronomically more.

Imagine all of the people who could have been employed for that amount of money, and the revenue lost as a result of government regulations.

The IPA also estimates that under Australian Governments lead by Gillard and Rudd, a staggering 444 bureaucratic government bodies were established in Australia, of which 198 are engaged in imposing regulations on different industries. With over 700,000 Australians unemployed, and Australia in record debt, with a growing elderly population requiring assistance, instead of providing taxable income, and investment at record lows, it must be thought about and asked, how will this make us a growth centre?

India is a current example of how a country can turn an economy around, improve the lives of its people, lifting hundreds of millions from poverty levels, and move towards becoming a major growth centre.

When Prime Minister Modi was elected as Prime Minister in May 2014, he inherited a sluggish economy that was struggling in part because of renowned excessive government tape3. Prime Minister Modi said in 2014, “The country can progress only if we end red-tapism. No red tape, only red carpet, is my policy towards investors.” Since coming to office, Modi has embarked on making civil servants more accountable, changing the public service culture, radically cutting red tape, speeding up the process of incorporating a company, making it easier for companies to get electricity, encouraging India’s states to make doing business easier, holding regular meetings with top bureaucrats to enquire as to why projects haven’t been completed or are delayed, restricting official forms to one page and reining in the authority of federal inspectors.

The majority of mainstream economic measures indicate that the Indian economy is much stronger and is performing better as a result of Modi’s actions to curb government tape. According to figures published in The Wall Street Journal, India grew at 7.6% per cent for the year ended March 2016, resulting in India overtaking China as the world’s fastest-growing big economy, indeed, the fastest growing economy in the world.

The Prime Minister told me, India’s economic growth had doubled after just one year in office. Inflation was almost halved from what it was a year earlier, car sales growth was up, industrial production growth returned into positive territory, India’s budget deficit had been reduced to 3.9% of GDP and foreign direct investment was up over 60% from a year earlier from $24.3 billion to $40 billion. This significant reduction of government tape, is insuring that India is fast achieving raising living standards for its people, and becoming a key global growth centre.

In my view, Prime Minister Modi should be congratulated and emulated.

As then president Ronald Reagan said, “governments first duty is to protect the people, not to run their lives.”

The second key pillar to becoming a growth centre is to ensure low government burdens. High taxes, increasing licence fees, and other government imposts provide disincentives to business as to where to invest.

Low tax rates not only encourage businesses to invest, but it is through this investment that jobs are created and revenues rise.

As Margaret Thatcher used to explain “Let us never forget this fundamental truth: the State has no source of money other than money which people earn themselves. If the State wishes to spend more it can do so only by borrowing your savings or by taxing you more. It is no good thinking that someone else will pay – that ‘someone else’ is you. There is no such thing as public money; there is only taxpayers’ money.”

The more a business pays in tax, and meeting other government burdens, the less money is available for that business to invest and grow employment, or enable it to give salary rises and bonuses.

As Ronald Reagan said “The problem is not that people are taxed too little, the problem is that government spends too much.”

To be a global growth hub, a nation must be internationally cost competitive. Critical for cost competitiveness is low government costs, which Australia does not have. High tax rates and increasing licence fees and costs of meeting and complying with government tape, reduce a nation’s international competitiveness, and its potential to be a global growth hub.

It is not enough to talk of jobs and growth and rely on a countries natural advantages to become a global growth centre, nations have to have low government cost burdens, to ensure they can remain internationally cost competitive and to ensure that investment flows into that nation. Without this, a country could never be a global growth centre. Here in Australia we are not only a heavily over-regulated country, but we are an over-taxed and licenced one too.

Out of the OECD countries, Australia has the fourth highest company tax rate (for large businesses), up there with Greece, Portugal and Belgium, who’s economies are all severely struggling.

Australia’s 30% corporate tax rate is well above the world average corporate tax rate of 22.38%, and higher than that of other countries in the Asian region whose average corporate tax rate is 20.86%.6&7 The Tax Foundation found that every region in the world has seen a decline in its average company tax rate over the past 12 years from 30% in 2003 to 22.8% in 2015. Australia’s has remained constant at 30% (for big businesses) across this period.

Take Singapore for example.

Singapore is one of the world’s most successful countries that has been able to transform from an undeveloped nation with low living standards, into an Asian growth centre, with its standard of living so high that it’s income per capita is the fourth highest in the world. All this in only a few decades.

Unlike Australia, Singapore has no natural resources, it even has to import its water, and all its minerals and most of its food, and has inadequate land space, having to create more, making Singapore’s growth centre record even more impressive.

Sound fiscal policy, a policy of no government regulations to delay investment or businesses, low taxes and tax incentives underpinned investor confidence and have been critical to Singapore becoming a growth centre, raising Singaporeans standards of living. We only have to study and take ideas out of the success record of our neighbour’s history under Lee Kuan Yew to become an international growth centre.

Currently, Singapore’s corporate tax rate is 17%, compared with Australia’s 30%.

In addition, Singapore’s top personal income tax rate is 22%, which may also help to explain Singapore’s work culture. Compare this with Australia’s effective top personal income tax rate of 49%, including various levies.

Singapore is the least red-tape burdened country in the world, truly open for investment and business. Former British Prime Minister, Sir Winston Churchill, stated “for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

Also, take Israel for example, which I recently visited. The Israeli people are so grateful to have a country and are very proud of their country’s achievements, in its relatively short history, and despite considerable difficulties. Such as, little water, they have become the best or one of the best at desalination and recycling waste water in the world, and of course, the difficulties of lack of security given their neighbours. They are very proud of the hard work, sacrifices and achievements of their people.

When I asked them what they love about their country and what they like to do when not working, I was repeatedly told by the Israelis I met, of the foregoing. I couldn’t help but admire their culture, a culture that has provided significant growth for their country, despite real adversities. More than once I heard that they were the originators of brainstorming. As they said, they learnt to do this thru adversities, indeed their need for defence has driven them to new technologies, such as drones and vehicles without people.

I also couldn’t help compare our culture, do we admire people who work hard, sacrifice and achieve? When asked why we love Australia, do we hear it’s because of the people who work hard and achieve? In summary, Australia, and indeed other countries who want to have the benefits of improved standards of living, should be acting urgently to significantly reduce tax rates and other government burdens, which serve as an impediment to business, investment, and people’s work culture, and to becoming a global growth centre.

Although there is much work and changes needed for Australia to be able to become a real growth centre, it’s not impossible.

India and Singapore and others, have shown us how it can be done. And let’s not forget, the growth and achievement of Israel in a relatively short time, despite its significant adversities.

Thank you very much again for inviting me to speak and for your kind award. I wish you all the best for your summit.

Courtesy of Mrs. Gina Rinehart

Article – Gina Rinehart: Australia’s new queen of the cattle stations

by 7 November 2016

11 October
Sue Neales
The Australian

It is part of Australia’s bush folklore that when the helicopter carrying Chinese magnate Xingfa Ma touched down last year on a muddy Gulf of Carpentaria beach — so Ma could announce he ­wanted to buy surrounding Wollogorang Station for $47 million — the billionaire had never before visited the remote region.

Nor did he know how many cattle were on the 705,000sq km station on the Queensland-Northern Territory border, or even how the premium price proffered by its real estate agents was determined.

And when Ma’s son tentatively asked his father what he was going to do with the rough remote bush country with its 80km frontage to the crocodile-filled Gulf, Ma ­reputedly spoke of its “development potential” and his vision that in a few decades, or centuries, a city the size of Melbourne would cover its shores.

It’s a story that hardened cattlemen love to tell, poking fun at the seeming ignorance of many cashed-up Chinese rushing to buy farms to reap the financial benefits of the Asian food boom.

But there is nothing rash or ill-informed about the $365m joint bid for the bulk of the Kidman cattle and land empire by Australia’s richest woman, Gina Rinehart, and Chinese real estate billionaire and AFL sponsor Gui Guojie.

(It is also likely Ma, who had ­already spent $20m buying two Pilbara cattle stations as well as Ferngrove Wines, had done his due diligence, though the steep $47m price tag appears to bear little relation to Wollogorang’s productive capacity.)

While the Hancock-Shanghai CRED deal was only locked in over the past eight days — and the bid agreement signed by their Australian Outback Beef consortium and the Kidman board late on Sunday — it has all the hallmarks of a winning proposal.

After the Turnbull government vetoed two previous majority-­Chinese ownership bids for the Kidman group as not in the ­national interest, a consortium 67 per cent owned by Rinehart’s Hancock Prospecting and 33 per cent by Gui’s CRED group is more likely to be politically and publicly palatable.

One Nation senator Pauline Hanson, always opposed to the sale of farmland to foreigners, ­declared she is happy, given “the vast majority of the company ­remains in the hands of Australians”.

“Ms Rinehart has my full support and gratitude,” Senator Hanson said.

“I have faith in her love for the country and its assets, and won’t stand in the way of an Australian buying the country’s largest cattle property.”

Vocal critics of the flood of station sales to the Chinese — including radio presenter Alan Jones, senator Nick Xenophon and Deputy Prime Minister Barnaby Joyce — also bestowed their ­approval.

Increasing the likelihood that the Hancock bid will win the gol­den tick from the Foreign Investment Review Board and Treasurer Scott Morrison is the exclusion from the deal of the world’s largest cattle station, Anna Creek, and the neighbouring Peake station. It was the inclusion of Anna Creek, 27,300sq km of sprawling low-productive outback country to the west of Lake Eyre, which includes Defence’s high-security Woomera Rocket Range, that led to the blocking of a bid led by the Shanghai Pengxin group for the Kidman properties for reasons including national security.

“The parcel of land that we’re talking about is some 1.3 per cent of Australia’s landmass; the largest single parcel (Anna Creek Station) is next to the Woomera Protected Area,” Morrison said when ­rejecting that Chinese bid in Nov­ember last year.

“We welcome foreign investment but as Treasurer I will always make sure that investment is done in Australia’s national interest.”

Presuming Hancock and Shanghai CRED succeed in buying S. Kidman and Co 18 months after the publicly listed family company was advertised for sale, the agricultural sector is asking if the magic formula for foreign ­investment has now been found.

Is one-third foreign ownership — especially when Chinese companies are involved — with the majority partner controlled by Australians the new acceptable face of businesses wanting to buy agribusinesses?

David Goodfellow, former head of Macquarie’s Bank’s Pastoral Fund and Elders, and now the local managing director of Chinese agribusiness and manufacturing conglomerate the RIFA Group, certainly hopes not.

RIFA has bought, with full FIRB approval, $150m of cattle and sheep properties in western Victoria and northern NSW — ­including the prized $14m Blackwood estate near Dunkeld — with no Australian partner involved. “This (Kidman bid) is obviously a strategy they think will work ­because other bids have failed, but I think it’s a long stretch to say this 33 per cent to 67 per cent (ownership balance) is a preference backed by FIRB,” Goodfellow says.

“I know there is criticism that FIRB rules about foreign investment are not clear enough but I don’t think there should be hard rules around part-ownership ­because it needs to vary according to investors, their experience and appetites.

“I don’t mind 100 per cent foreign ownership; to me (FIRB ­approval) should be more about is there local control, Australian board directors and a robust local management team that can make autonomous decisions and understands Australian farming systems and things like buying locally and supporting local communities.”

The danger of blocking foreign bids for farmland unless an Australian partner has a majority stake is that capital inflows could dry up, says David Williams, managing director of specialist agribusiness corporate advisory firm Kidder Williams.

Agriculture needs capital to ­develop underperforming farms into productive businesses, while intensive spending on large outback cattle stations such as those in the Kidman portfolio could lift their carrying capacity fivefold.

“This is an elegant outcome for the government in this special and sensitive case but it’s also a bit of luck because Gina (Rinehart) has deep pockets and was prepared to pay what the (Pengxin) Chinese bid was also putting up for Kidman, when no other Australian bidder had been able to make that price work,” Williams says.

“But if we always insist on a partnership model, it will bring the price down because Australians are generally not prepared to pay the same price as foreigners for these assets, so the average offer would be lower. That will only hurt Australians trying to sell the farm and get off the land.

“We will miss out on (deals) if the partnership model and minority Chinese ownership becomes the norm; and we need this capital if we are going to sweat the (farm) assets to produce more food.”

Courtesy of The Australian

Article – Past, present and future in Gina Rinehart’s land plan

by 25 October 2016

10 October 2016
Terry McCrann
Herald Sun

AUSTRALIA’S richest woman Gina Rinehart has brought together two of the greatest names in the nation’s history and in its development. She has very neatly unified past, present and future.

In spending around a quarter of a billion dollars to buy control of a slice of Australia, big enough to actually be seen with the naked eye from the moon, she’s also got Treasurer Scott Morrison out of a rather uncomfortable position.

More importantly, Rinehart’s deal provides Morrison with something of a template for handling a critical part of what is going to be our most dominant, most challenging and most complex relationship with any country over the next half-century at least.

If only we had ‘half-a-dozen Rineharts’, able and prepared to do the same thing. Obviously, we don’t: we’ll need to promote ‘synthetic Rineharts’ to do what she’s done, from among the ranks of mainstream institutional investors instead.

On Sunday, Rinehart’s central company Hancock Prospecting announced the $365 million purchase of the S Kidman & Co pastoral group, which has an average carrying capacity of 185,000 cattle over 101,000sq km of leases stretching across three states (Queensland, South and Western Australia) and the Territory. That’s an area equal to about 1½ Tasmanias, or around 40 per cent of Victoria.

Rinehart’s Hancock will own two-thirds of and control the corporate buying vehicle, the other one-third will be owned by a Chinese partner — splitting the cost roughly $243 million/$122 million.

Hancock and Kidman: these are two names that resonate through Australia’s development history.

Kidman encapsulates the sprawling pastoral empires — the ‘sheep’s back’ — on which Australia was built through the second half of the 19th century and running through the first half of the 20th century.

Hancock — her father Lang — personifies like no other the discovery and development of the huge resources projects, initially in WA in the Pilbara but spreading into Queensland, in the second half of the 20th century and which now are the foundation of our contemporary and future prosperity.

Those projects — the Pilbara iron ore mines, the Queensland coal — were built entirely on Japanese demand and Japanese money, but today that has been completely swamped by the extraordinary appetite of its mainland rival China.

In using minerals-generated wealth to buy control of — and keep under Australian control — one of the great pastoral companies, Rinehart has imprinted her unifying vision on the next stage of our economic history. She has blended past and present to build new dynamic foundations for the future.

For the last two decades China has poured tens of billions of dollars into buying our coal and iron ore. We have quite literally been shipping off huge lumps of WA and Queensland to the north.

A much wealthier Middle Kingdom then started to buy our food. That mid-20th century fantasy of persuading the Chinese to put (Australian) sugar in their tea, played out in the 21st century reality of Confucian mothers buying our milk instead, not for tea, but in baby formula form. Most recently, the Chinese have been coming to buy the land on which it’s all produced (and the air above our two major capital cities — apartments — but that’s another story).

Just as China’s purchases of Pilbara ore went from zero to half a billion tonnes a year in the space of less than a generation, we haven’t even begun to understand how big its new appetite for Aussie land that stays put is going to be.

And so, we equally hadn’t even begun to understand the awkward — actually, the extremely serious — questions that would pose. Do we kick back or bend over?

The Rinehart deal shows how we can best handle it. Broadly, not to rebuff it; heck, that would be like King Canute ordering a full-on tsunami not to keep coming up the beach. But equally, not to just let China buy what it wants as we did with coal and iron ore.

But to embrace and control and, even more hopefully, channel it.

Earlier this year Morrison rejected an all-Chinese bid to buy Kidman. The latest deal is a resounding endorsement of that decision. It should also, very importantly, bury any resentment over the rejection. Most importantly, it points to a win-win future.

The latest proposal would keep majority ownership and control in Australian hands. Better to establish that principle upfront. It’d be a lot tougher to lay down that principle if Morrison has given carte blanche to total or even just majority ownership to such a major deal, scooping up so much of our land.

Contrary to extreme open-door free-marketers, these things actually matter. Especially when we have such a lopsided relationship with one country, and a relationship which is just going to get more lopsided as we stumble, inevitably with little sense of strategic direction, through the 21st century.

Rinehart acted in her own perceived best interest. She has also acted in the national interest, both in the deal itself and the policy guidance it provided. She deserves considerable credit.

It’s worth recalling how last year, according to the ATO, this company of hers, Hancock Prospecting, paid $466 million in company tax, at almost spot on the 30 per cent tax rate. A very large number of Australians are riding on her back.

Gina Rinehart’s Hancock will control the corporate buying vehicle.

Courtesy of the Herald Sun

Australian Resources and Investment – Articles by Gina Rinehart

by 12 September 2016

September 2016
Gina Rinehart
Australian Resources and Investment, vol.10 no.3

Roy Hill Wins PMI Australia’s Project of the Year Award

Mrs. Gina Rinehart and Sanjiv Manchanda’s acceptance address for Project of the Year at the 2016 Project Management Institute Australia Awards for Roy Hill’s mega iron ore project.

Roy Hill Pink Truck Launch Celebration

The introduction of the first of Roy Hill’s pink trucks in recognition of breast cancer, breast cancer research and support initiatives.

To read both these articles, click Australian Resources & Investment Vol 10 #3

Courtesy of Australian Resources and Investment

Article – Gina Rinehart dips in to pour funds into rowing

by 2 September 2016

25 August 2016
Simon King
The Australian

Rowing Australia will today announce a renewed partnership with Australia’s richest woman, Gina Rinehart, which is being described as “transformational” by its president.

Rinehart — who has already invested in the sport alongside the national swimming, synchronised swimming and volleyball teams — will, through Hancock Prospecting and the Georgina Hope Foundation, become the principal partner of Rowing Australia over the next four years.

“This is a significant and transformational investment for our sport. It’s the biggest, significant financial, commercial partnership we’ve had,” the president of ­Rowing Australia Rob Scott told The Australian.

Scott said the investment would primarily deliver direct ­financial support to all Australia’s elite rowers who attend the sport’s national training centres.

“It will help support their daily living expenses and also bringing us in-line, if not ahead, of the rest of the world in this regard,” said Scott, who is also the managing director of the industrial division at Wesfarmers.

“If you look at our past in rowing, a lot of the elite athletes have had to move state to state, year on year from different training venues and different coaches and that has not led to the best preparation.”

An ongoing problem for Australian rowing — and something Scott and his team have been at pains to address — is the fragmented, federated nature of the sport which sees athletes train with coaches away from any centralised team.

“It has also made it very difficult for them to hold down jobs or continue their studies,” Scott said.

“So providing this certainty with respect to the national training centres, firstly provides a world-class daily training environment but, importantly, it en­ables our athletes to have stability around location and the rest of their lives as well.”

Rinehart’s investment in rowing first came about last year when she funded a three-month Destination Gold camp at the nat­ional training centre in Canberra for all the Olympic qualified crews.

“That was big step forward for our team and through that process we got to know Hancock a lot better and Ms Rinehart got to know our athletes a lot better and she actually took an incredible personal interest in our rowers,” Scott said.

The second element to the new cash will be an investment in state-based pathways and development programs to grow the pipeline of potential elite rowers.

Scott, himself a two-time Olympian with a silver medal in the pair at the 1996 Atlanta Games, said the money meant the sport could get straight back to work after an Olympic Games that yielded Kim Brennan a gold medal in the single sculls and silver in both the men’s four and men’s quadruple sculls.

“In some sports, rowing included, it takes a while for the sport to get their act together post Olympics — we’ve already done the planning and we’re very keen to hit the ground running in the next couple of months to give our athletes the best opportunity,” he said.

Scott said he was happy with the improved Rio Olympic performance after Beijing yielded three silver medals and two bronze.

“With Kim winning our first gold medal for eight years and there being nine rowing medallists coming home, we’re really pleased with that result,” he said.

“We also increased our rating in the Olympic regatta from No 9 to No 4 on the rowing medal tally and that was a pleasing outcome.

“There are a number of our crews who would have liked to have better results on the day, which is understandable.

“It’s a relatively young team and we’re excited about the future opportunities for those athletes.”

That said, with Brennan likely to retire from the sport at an elite level, Scott and the team will need to find gold elsewhere.

“We are confident we can continue to improve our rowers — we want to be successful on the world stage and they want to win — our job in sport is to give them the best opportunity to do that,” he said.

“Whatever Kim decides to do, she will continue to be a huge inspiration for all rowers — and we don’t need to look much further than Kim Brennan for an example of what you need to do to be a gold medallist.

“Kim is not just a sensational athlete, she is also a fantastic individual and her result is the combination of many years of hard work from herself and her coach, Lyall McCarthy.”

That longer-term partnership, based at a national training centre in Canberra is the sort of stability Scott is trying to replicate for all the Olympic crews.

“The stable quality of coaching and daily training environment has certainly helped Kim, but there was not an athlete in the team who trains harder and is more determined than Kim Brennan,” Scott
said.

“Now in the future with an opportunity to have a better-quality training environment and more stability and certainty for athletes, combined with good support structures will certainly lead to better results.”

Gina Rinehart at a beach volleyball match at the Rio Olympic games.

Courtesy of The Australian