Friday, May 17, 2013

Miners not giant ATM for government to plunder, Gina Rinehart warns

By Business editor Peter Ryan

Australia's richest person, mining magnate Gina Rinehart, says the Government has an unhealthy reliance on the resources sector and has been treating it like an ATM.
In a speech delivered to an Australian Mines and Metals Association conference in Melbourne today, Mrs Rinehart says the nation's debt levels are unsustainable.

She says that without reform, Australia risks following the eurozone into financial and social chaos.

Here's my analysis from this morning's edition of AM.

"What few seem to properly understand - even people in government - is that miners and other resources industries aren't just ATMs for everyone else to draw from without that money first having to be earned and, before that, giant investments are made," she said in a video recorded for the conference.

"It is incredible that after the last six years of record commodity boom times, we now find the once lucky country in record debt, with the federal budget tipped to deliver yet another deficit, to further increase our record debt.

"This debt is simply unsustainable, especially when Australia now faces an increasing elderly population with increasing needs, and fewer workers to pay for it all. This lucky country has got to start thinking, and acting.

"What few seem to properly understand - even people in government - is that miners and other resources industries aren't just ATMs for everyone else to draw from without that money first having to be earned and, before that, giant investments are made."

In a call to arms, Mrs Rinehart again describes Australia's economy as "too expensive and cost uncompetitive", saying government red tape and regulations are damaging the nation's reputation on the world stage.

Mrs Rinehart has cited Woodside Petroleum's recent decision to shelve its $40 billion gas project at James Price Point in Western Australia, and comments from the former global head of Ford, Jac Nasser, who predicted the eventual demise of the Australian car industry, as evidence that Australia was becoming am unattractive place to do business.

"No wonder major projects like Browse have been cancelled. This should make us all sit up and think," she said.

Mrs Rinehart's address, to be posted on YouTube, was highly critical of Australian governments and
the complacency of taxpayers.

However, it does not mirror earlier inflammatory remarks about African workers being prepared to be paid "less than two dollars a day" that were made in a similar recorded speech last year.

Mrs Rinehart - who is executive chairman of Hancock Prospecting - also appears to attack the complacency of both Labor and Coalition governments which have relied on taxes from the resources sector.

Wednesday, May 15, 2013

Business lobby slams Budget as lost opportunity

Business is the big loser out of last night's budget.

Without a sweetener in sight, business groups are now expected to ramp up their campaign against the government.

The Business Council of Australia, which represents Australia top one hundred companies, says it has no reason to believe the budget will return to surplus by 2016.

The BCA's chief executive Jennifer Westacott says the Budget was a lost opportunity to put the economy on a stable footing and thinks the government will continue to "muddle along".

Listen to my interview with Jennifer Westacott broadcast this morning on AM.

Australian dollar falls on Treasurer's Budget speech; slow growth forecasts renew RBA rate cut talk

A$ falls from from 99.73 US cents as Budget speech begins  Source: Bloomberg

Tuesday, May 14, 2013

Business lobby sink boot into unseen budget in strategic broadside

By Business editor Peter Ryan

Even though much of tonight's Budget has already been leaked, Australia's business lobby groups seem convinced Wayne Swan's cupboard will be bare.

The big players have gone on a on a major offensive against the government, describing the budget process as "chaotic".

The frustration has boiled over with the big four business lobby groups launching a carefully planned broadside against the government well before the Budget fine print is out.

The strategy by the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce & Industry and the Minerals Council represents a new war footing from the big end of town.

The big players normally restrict themselves to traditional lobbying tactics - issuing discussion papers, commissioning reports, sending out media statements and maintaining a constant presence in the Canberra press gallery.

Then of course there are pre-Budget submissions delivered in the weeks and months before the Budget which is accompanied by targeted briefings to journalists with influence.

That is normally the extent of the diplomatic prodding in addition to the odd diplomatic foot in the door.

The "powder is kept dry" on any criticism - or praise - until the fine print has been examined.

Not this time.

Rather than wait, the business lobby is ramping up its complaints about a lack of genuine process and consultation as concerns deepen about the credibility of the Budget.

Today's Budget will be the culmination of significant tensions about the consultation style of the Rudd and Gillard governments.

Business is still seething from the legacy of the super mining profits tax, the carbon tax and more recently the funding model for the National Disability Insurance Scheme.

The Business Council for example is worried that an increase to the Medicare levy without a cost benefit analysis could set the NDIS up to fail.

On the dollars and cents from, the business lobby knows there will be few - if any - sweeteners. A cut to the corporate tax rate seems off the table, although business remains concerned about how it will fund the recent increase to employer superannuation.

But at the very least, business groups are looking credible budget assumptions, an end to ad hoc changes and realistic plans for spending rather than timing shifts that could see spending pushed out over ten years.

Which underscores the business lobby's view about the government reputation and credibility which was damaged by the dumping of the surplus commitment a week before Christmas last year.

In the leadup to the dumping of the surplus commitment, business groups have warned that while they wanted to see a surplus, it didn't have to be immediate and shouldn't come at any cost.

Once again, there is unusual unity from the big four business groups.

But there's also solidarity from the government today, with senior ministers showing there's no love lost, describing business leaders as self-interested whingers and moaners who have ignored the government's reforms.

It's hard to find an olive branch amid the spin from both sides.

But it's clear that any concession to business in today's Budget papers seems unlikely.