Article by Mrs. Rinehart in Australian Resources & Investment Magazine:Seeking Debt-defying Change19 December 2013
Mrs. Gina Rinehart
Australian Resources and Investment, vol.7 no.4
While Australia’s new political leadership and a few from our business community were working at APEC CEO Summit, recently held in nearby Bali, the country’s media was obsessed with what seems trivial when compared to our extraordinary debt challenges.
You can’t help but think there’s almost a sense of denial that we may have a problem. Instead, our country is being focused on the diminutive rather than the monthly millions of dollars in interest payments alone owed on Government’s debt, for which we need to borrow more money and incur more debt to even meet such interest bills.
As I write this, Joe Hockey has just announced he’ll raise the debt ceiling, up an incredible 66% to $500 billion or half a trillion. There is talk of a target to deliver a surplus of 1 per cent of GDP before 2024 – 11 years away. The story struggled to make it to the evening TV news yet it affects every person in this country, including our next generations.
Barnaby Joyce was once criticised for stating what is obvious to most in business; “if you don’t manage debt, debt manages you”. For some reason, this didn’t register with many in Canberra. Keeping the debt ceiling lower at least imposes more expenditure discipline on Government. With this move, we are into the unknown with our country’s finances. Or, perhaps I should say, emulating the paths of various countries in Europe.
In fairness, Joe Hockey didn’t cause this extraordinary financial dilemma but it is primarily his duty to fix it, for which he needs to be serious about quickly cutting Government expenditure. In seven years, from 2007, we’ve gone from hardly any reliance on debt to borrowing to make the interest payments. When is the time right for planning and action in our country about Government over expenditure? But back to APEC in October: As national leaders mixed in front of the cameras, or away from the spotlight, there were also many speeches – virtual sales pitches – from member countries. I was privileged to be there at APEC CEO Summit, listening to stories about the economies of our trading partners, critical for the ambitions and futures of their people. These are Australia’s neighours, our customers and trading partners. Their stories from the highest of their representatives are subjects of great importance – yet their messages and the opportunities were barely reported back here.
With little exception, nearly all that Australians heard about APEC from their media was that Tony Abbott attended; and met a few world leaders. What dominated the news attention while APEC had leaders on our doorstep from 21 countries was what the new Prime Minister had to say about the very minor travel bills of some of his now-Ministers.
In part, the “scandal” was this: I had given The Hon. Julie Bishop, then Shadow Minister for Foreign Affairs, a free one way trip to India in a friend’s plane which I’d chartered, wrongly called my private jet (I don’t have a private jet). I thought it was beneficial and important for her Foreign Affairs role that she meet important business friends all conveniently together from the top of the Indian political and business communities for this important Indian family wedding.
The media figured that was outrageous when she had charged the taxpayers for her flight back home. Barnaby Joyce was also lined up for acres of abuse, not actually for the India trip at all, which taxpayers didn’t pay for at all, but for his return journey from Kuala Lumpur, where he’d also been working.
Isn’t it time we dealt with economic matters more seriously in Australia instead of allowing them to be dwarfed in significance against a cranked up story about a couple of return flights? We know or at least, should know, the truth is paying our debt down relies on our overseas customers buying our goods and resources and our businesses expanding.
I am a constant target for many of the political left including in the media for daring to suggest we, as a Nation, need to lower our costs and get more competitive, even more urgent when our Aussie dollar is high. I say often what is on the mind of many in the business community – be they family operations or larger, and am frequently asked to speak on these critical matters. It is simply fundamental; we need to lower our costs to be competitive. There’s an urgent need for a reduction of regulations and their expensive compliance. In these times of the high Aussie dollar when we have to compete with the world, but have some of the highest costs in the world, we can’t afford our Governments providing added drag and extra expense.
Exploration and investment should be encouraged. Instead the message Australia has for years sent to the world is almost the opposite. We are overdue for some tough decisions and it’s not 3 helpful that every time such issues are raised its invariably misrepresented and politicised, without considering our future.
In an international market place, we are judged on price and reliability. Competitors whose costs are lower and whose Governments don’t over burden to enable things to happen, they see the results in their economies! If our miners miss out, so do the related industries that rely upon them, (even the offices in Sydney and Melbourne they help to support), Australia misses out and we are back watching the debt clock increase and increase.
It was apparent at APEC that leaders in our region know that their economies matter for their own people’s future. Plenty of entrepreneurs from Indonesia, Japan, China, Russia and elsewhere were actively seeking opportunities. And their leaders were strongly declaring their countries were open for business and welcoming it. Sadly, Americans and Australians were scarcely present. We in business need to better spread the word that with a change in the national Government, our country has re-opened for business, and impress upon our political leaders, that with Australia’s high dollar, now is the time for urgent tough decisions, and, serious reductions in regulations and approvals and permits.
Mining is an industry that sees less than 1% of prospects becoming a mine, too many believe, that without any work, or investment, a tenement then gushes money to the greedy few! The related industries dependent on such mines and nearby communities are forgotten. Every day we have to take on the Brazilians and Indonesians. We should be far more aware of the developing African nations with their giant reserves, low costs, and little regulation. In the Australian equation of some of the highest wages in the world, high taxes, high Aussie dollar, and too much expensive regulation, approvals and permits – something has to give.
On 22 November this year, a very special date for Australia, we will celebrate the inaugural National Day for Mining and Related Industries. It seems extraordinary in a country so economically reliant on this sector including tis related industries that it’s never happened before. We are perhaps one of the most misrepresented industry groups in the country, yet, essential for our economy. We have a veritable industry of critics matched with a political movement that seemingly exists to envy us, or at least not appreciate us, and with departments expanding to cause more approvals, permits, and regulations in their interests, – yet, a country that is openly 4 reliant on us doing well so our children and grandchildren have opportunities and aren’t having to be burdened with the onerous responsibility to pay off our recent years excesses. I hope you will join me on our inaugural day and stand proud. Please join us at any functions held for this day, including the launch at lunch in Brisbane, at the Hilton, with our Resources Minister. I also hope you will support the Small Business Association’s launch for their small business weekend forum with a Gala Dinner at Bond University on 22nd November and continuing 23rd November at Bond University also. Small business is our country’s biggest employer, very important for our future so they also should be supported and listened to.
Nearly 110 years ago, while campaigning for re-election in Britain, a young Winston Churchill won over a town-hall meeting with perhaps one of the wisest observations ever made of the relationship between business and government. He said in response to a heckler, “I contend that 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”. Here we are at the end of 2013 and that wisdom still stands as strongly as ever. And even earlier Voltaire said: “In general, the art of government consists of taking as much money as possible from one party of the citizens to give to the other”. Isn’t it time we learned from this? On the positive front, it is exciting to see that both major parties and the National Party are supporting policies for a special economic zone for our north, with reduced taxation and regulation. I’m delighted to be an Ambassador to the Northern Territory, and look forward to seeing such policies implemented sooner rather than later, and look forward to seeing exciting opportunities result for our north, which also helps Australia!
Courtesy of Mrs. Gina Rinehart & Australian Resources and Investment