Small Business Association – Rinehart Annual Address. Friday 22 November 2013.
EMBARGOED UNTIL 5 PM EST NOVEMBER 22, 2013
A few days ago I was in Canberra and heard Barnaby Joyce give his maiden speech, after making the transition from Senator to a House of Representatives member.
In a very fine contribution mentioning the values of work in the country, one phrase also stuck out, “two things happen to you in this building (Parliament House) – you gain weight and lose touch.” It may seem a funny line, but depressingly true. Too many of our political servants do lose touch with the things that matter. Their electorate priorities and the real needs of Australia for our future.
Australians are crying out for our political leaders to have vision and enable a good economic path for our future. A vision that will lessen the size and expenditure of government. A vision that will allow the immense productivity of the north, and a vision that will allow businesses to grow, to build our standards of living and provide sustainable jobs.
Somewhere on Capital Hill, they seem to forget that it is through entrepreneurial effort, investment, risk taking, innovation, competitiveness and productivity that wealth is created and taxes paid that pay our police, provide our prisons, our public hospitals, our public education, provide for our increasing elderly population, and our disabled, and our national defence.
I and others present, contrasted the humour and wisdom of Minister Joyce’s speech with that of a new young Labor MP. He was proud of how he had entered parliament from a welfare dependent family.
He thanked the pivotal influences in his life – other labor MPs and the Union movement. He spoke of how Labor were the moral side of politics as it believed in government spending and the redistribution of wealth. There was no mention of entrepreneurs or businesses being necessary to first generate such wealth.
The contrast between the two speeches couldn’t be starker, and it highlights the work we have ahead of us. If one of the good ones tells us our politicians in Canberra lose touch, the SBA needs to make sure they can’t lose touch with the engine room of our economy, our future, small business.
You need to let them know that they can’t spend and redistribute unless there is something there to start with. All government revenue comes from the efforts of others. If government doesn’t control it’s spending it has unpalatable and unsustainable options – raise taxes or borrow more.
Higher taxes destroy incentives for risk takers. Indeed as many of you would be aware, they don’t just destroy incentives, but the ATO is the number one petitioner for small business bankruptcies and liquidations. Government borrowings rob from tomorrow to spend today, and risk turning us into another Greece. Both are bad news.
And this is the challenge for us all. We need to get this message out; not just to our politicians, their advisors and minders, but to every Australian – particularly the next generation.
We need to see for ourselves the result of excessive or reckless government spending, the entitlement mentality, the welfare state and the loss of work ethic. It’s called Greece, or Spain or Italy.
Broke, dependent on others, civil unrest, political extremism and massive unemployment especially with youth. It is the future for a nation that ignores the fundamentals for too long.
I regret that is not a message people like to hear, but many more need to hear and understand.
Our media repeatedly attacks those who dare to point out such fundamental realities, and I understand that some may be too nervous of speaking out.
But from my experience, although the media attacks have been untruthful or distorting, devoid of factual support or biased, and shows such journos in a relevant light, they generally don’t reflect the views of country Australians, and those in small business or the mining and related industries.
Wherever I go people come up to me and say, “please keep going,” “Australia needs such leadership”, “good on you”, and other positive and genuine comments. I am fortunate to have many requests for speaking engagements, so much so that unfortunately I can’t honour them all.
But between us all we can. Your experience and understanding of the fundamentals enable you to spread the message too.
You understand, whether through instinct, training or experience how critical it is to get the fundamentals right.
There has become too much of a disconnect from those basics, and too much moral ground has been taken from the hardworking, risk taking, sacrificing members of our communities, the contributors and employers, and placed instead with those who don’t create the revenue, but focus on spending or overspending or wasting it OFTEN irresponsibly.
And right now is a time to share that message, as we are approaching Christmas, a time for gifts.
This Christmas, you can help nurture a new beginning in the direction of our nation. We need to inspire a new generation of entrepreneurs and risk takers and we need to empower them with some of the most important educational lessons they will receive.
So, when you think of Christmas gifts this year, give the gift that will keep on giving. For children, may I suggest giving a good book? A good book is a gift of knowledge. Good books fuel ideas and inspiration, creativity and passion, common sense. They let us learn from others experiences. They allow leaders to develop and grow from the insight of others.
And they can help change a culture. Change a culture, you can change a country.
As a child I read “The Little Red Hen”, great for Christmas stocking stuffers, and the “Norah of Billabong” series, great bed time stories to share with children. I still recall as a young girl at Hamersley station my father giving me “Norah of Billabong”, and the words he said to me “I think you’ll like this book”. He was right, I loved it. I read it many times. Later when I had my own children I was able to share this book with them, and spent many hours reading this and other Norah series books to them.
As a teenager, the work of Ayn Rand and Milton Freidman taught me much, including there is no such thing as a free lunch. Someone always has to pick up the tab.
The autobiographies of the successful, the hard working – these inspire and teach. Autobiographies of even those who failed provide valuable life lessons. I remember the books my friends Ron and Bill wrote of their successful lives, very carefully pointing to aspects of their endeavours that hadn’t been so successful. Both of my friends, both older than me, have told me the same, “learn from your mistakes.” I heard this from my dad too, good advice. Dad didn’t write a book, but did let me help him put together a collection of his speeches and writings, which reflected part of his life and what he learned from it.
Important lessons come to us in different ways.
As a child I was privileged to have a very fortunate upbringing on a remote station in the north of West Australia. There were no parties or TVs, so I had time to read at night, while the generator was on. It was a life I loved. Filled with station work and experiences I loved.
From about four or five years old my dad would take me on the windmill run. This involved me struggling with some of the gates to open them, so he could drive through, then I’d close them at each paddock.
Dad would help me with any I couldn’t do, BUT ONLY after first letting me struggle with the more difficult ones.
At each windmill that needed attention, the procedure was the same.
Out came the tool box and dad would lay out the tools on a piece of canvas on the ground. He then climbed the windmill ladder. He would then yell for whatever tool he wanted. I was supposed to know the tool required and bring it up the windmill ladder carefully but promptly.
Sometimes I brought the wrong tool, which meant I’d have to go down again, get another tool and go up again. I didn’t have any helmet or safety harness, nor did dad. I was just expected to be responsible for myself when carrying out this duty.
I’m not sure that today’s parents would allow or expect their four or five year olds to do this. But I was happy to help and have that responsibility.
My fathers and my working relationship changed over the years, stations became less a part of our working lives, but it was a working relationship that didn’t see annual holidays, often required weekend work, where there was no place for complaints, just work and duty, and thank goodness I had this background to help me cope later with more difficult years.
I’m very, very grateful for my upbringing.
It no doubt shaped me for better or worse, to be the person I am today. And has helped me greatly to take a small company with few remaining assets, mortgages and legal disputes concerning most of those few assets, to the far larger company that the Hancock Group is today.
From a small business start, we are now taking on a tier one, world class project that is one of the largest projects currently being undertaken on mainland Australia, Roy Hill. We’ve taken it from scratch, from when I first visited the area in 1992, after my father passed away, and achieved the tenements the next year, trickling in money when we could in the nineties, and then spending much more when we could do so this century.
Roy Hill will offer work to many and, once financed and built, will provide substantial revenue for Australia. Of course the knockers in the media write derogatory comments endeavouring to undermine our ability to raise the finance to complete the project.
I look forward to the project getting up and running, because our nation needs it.
Our record debt, and increasingly elderly population, run down hospitals, inadequate defence and struggling defence families, the needs of our disabled, and… I could go on and on to demonstrate how much our country needs projects like Roy Hill, and many more like it.
And we need our young people to learn the lessons that are too rarely taught. Fortunately there are still those who do, particularly in the country, and in family businesses.
I respect a young man, who grew up on a family farm with his brothers and sisters all helping out doing farm tasks before and after school.
They worked hard, and had a good country life. The farm produced various produce, including from dairy cows. This young man had gotten to know these cows as from the age of about 4, before dawn, while his older siblings were out doing their farm tasks; he went with his dad, over to the cows to learn how to milk them.
He heard me discuss my experience when I was young, and, quietly told me a private story that he has let me share with you tonight.
“What do you think I got for a birthday present from my parents when I was seven?” he asked.
I wondered, perhaps a bike? He said “no, nothing material; my dad gave me something far more important”.
The morning of his seventh birthday, he awoke at 4am as usual to go with his father to milk the cows. As they prepared to leave the farm house, his father put a hand on his shoulder, looked him in the eyes and said “son, you’re 7 now, you’re old enough to go and milk the cows by yourself.” Now for many of us, the idea of getting up at four on usually cold mornings, to go and milk cows, no birthday present, would be tough enough. But to be asked to do so alone, at 7 years of age seems like a pretty tough ‘present’, or, a great gift, as it helped to make this person who he is today.
To this young Australian, this showed him that his dad thought he was now responsible enough to do this important farm task all by himself.
He felt terrific being entrusted with this responsibility to help contribute to and help support his family on the farm.
This person has developed into a very fine, now 35 year old, Australian.
Very responsible, straight forward, honest, decent, not a lazy bone in his body. No chip on his shoulder, no sense of unearned entitlement, no artificiality, he’s prepared to work hard for his living, he doesn’t want handouts.
He is keen to help out, and work responsibly. He served this country at the highest levels as an elite soldier in the SAS and then as civilian in support of Australian Diplomatic Missions around the world, including in hostile dangerous places. He has received official commendations for professionalism and been decorated for bravery.
We have much to learn from him and other good, moral, hardworking Australians.
People like you, mums and dads, who risk, sacrifice, invest and strive to deliver to others the goods and services they want to better enrich their lives. For isn’t that what all of us in business do – seek to satisfy the needs of others? And while we seek to satisfy customers and raise standards of living, sprawling government imposes regulation after regulation, tax upon tax, impediment after impediment to make it harder for us to satisfy that customer, and lift standards of living.
And with our declining productivity and increasing high cost problems, it gets harder to encourage investment, investment Australia needs to maintain our standards of living. It gets harder to sell our products on world markets, because no matter if some may think we have some entitlement to world markets, let me be very clear about this, we have none. People overseas won’t continue to buy from Australia if they can buy cheaper and reliably from elsewhere.
In Australia, power bills have risen another 8 percent, power bill increases of course affect nearly everything, gas prices up another 10 percent, Bureau of Statistics tells us water rates are up 11 percent year on year, and that’s without the rising additional burden of regulations and their compliance expense. Is it any wonder that last month the national seniors’ organization reported over a quarter of a million Australians over 60 said they were regularly unable to pay their utility bills on time? Is this how we want our seniors, many of whom have worked for decades and paid their taxes, to survive? More expensive electricity has done what to help Australians? Let’s tirelessly back Tony’s efforts to repeal the carbon tax.
The over government, the over regulation, if allowed to progress as it has in recent years will create uncertainty, misery and lower our standards of living – just as we are seeing in the countries I mentioned earlier.
It seems that too few who represent us in the various parliaments have bothered to heed the messages. Small business was used as a department not to assist small business, but more so it seems as a place unwanted ministers with little or less business experience, could exit from, six different ministers in the last six years! That’s why we need to speak up, lest our voice not be heard amid those who think they want bigger government and more government spending.
Ayn Rand wrote “we are approaching the stage of ultimate inversion: the stage where government is free to do anything it pleases, while the citizen may act only with permission.” Now in Australia we are on a path from which we need to depart.
May I warmly congratulate all my friends at ANDEV for their efforts to excite Australia with the ideas of freeing our north from excessive regulation and taxation, to see the north of Australia progress. Some of the honorary, ANDEV Executive are with me tonight, may I ask you please join me in warmly thanking them. If you’d like to join ANDEV, please let them or Anne Nalder know, there’s no joining fee.
In 2009-2010, the Australian Bureau of Statistics found that 60% of Australian households received more in social benefits than they paid in taxes. Sixty per cent! Of course some of them genuinely need assistance and part of the government’s job is to provide them with a leg up for those who genuinely cannot look after themselves. But to have 60% of households, I ask, isn’t this too much? As Tony Abbott has said “government doesn’t create wealth, people do.” I remind, it has to be earnt, taxes paid, before can be redistributed.
Small business employs about half of all business engaged outside of government in this country, depending on the year, it contributes 20 to 25 percent of GDP.
It’s worth remembering what Barnaby said in his first maiden speech, when a senator for Queensland, 8 years ago “we have disenfranchised the right of our citizens to attain the greatest level of their personal freedom by attaining the highest level of control over their destiny which comes by being master of your own business.” Only last week, I heard a story of a petrol station owner ring a radio station to plead with Bill Shorten to support the abolishment of the carbon tax. His words trembled with emotion. His words were through tears at times. He told of running a 24 hour operation which employs 11 people. Costs are at an all-time high and margins are low. He’s tallied up 38 different separate local, state, and federal government agencies he has to write cheques to, just to stay open.
When electricity prices went up because of the carbon tax, he gave himself a pay cut, to the detriment of his family, but so that he could retain staff. He didn’t want to lay his staff off. His experience would be no different to many of yours.
Look what our company experienced for instance in this wonderful state in Queensland in recent years. We were at that stage investing and risking our money on three, tier one, world class projects in the Galilee Basin, including Tad’s Corner and Kevin’s Corner, at bankable feasibility study level.
Friends and I went to the ground breaking ceremony at Tad’s Corner for the first pit in the Galilee, and I had asked for a tally of how many approvals and permits we would need to build the project. My Queensland staff, we owned all 100% of these projects then, told me, “well over 3,000 approvals and permits.” Anyway I proceeded and then about six months later I went back to officially open the first open pit in the Galilee Basin. I checked again with my Queensland staff – how are the approvals and permits going. “We told you the wrong figure,” I was informed, “we don’t need in the three thousands, we found out there is more than 5,000 approvals and permits required!” How on earth can business cope with that!? And after the approvals, there’s years of bureaucratic expensive compliance.
The best way to ensure a better future for the next generation is to equip them with the knowledge, skills and attitude to work hard, and, the opportunity to do so.
For how many years have we heard from a succession of politicians that they will reduce their regulations and impediments. When? When will the 21, 000 of new regulations the previous government brought in, be repealed, and let’s not forget all the regulations and impediments the big government approach of Fraser and Howard imposed either. When will it be recognised that people should have more choice and responsibility in their own lives and businesses, indeed may even know some more about both, than all the departments in Canberra? Do we really need Canberra to tell us how to run our lives better, or our businesses? So, the choice is ours to make.
Shall we cower in silence lest the left media attack us, or the Government targets us? or should we fight back for a better future? Fight back with information, ideas and perseverance to let every Australian know we need less big government, less overspending government, there is a better way.
The choice is ours. I hope you will all choose wisely.
Small Business Association – Rinehart Annual Address. Friday 22 November 2013.