Gina, Wayne and the bigger fish
Wednesday, September 5, 2012/
The very boring verbal jousting between Gina Rinehart and Wayne Swan continued yesterday with Rinehart giving a video speech on the Sydney Mining Club website, banging on about her pet problems.
It’s all become pretty predictable now, with Gina criticising:
- the mining tax;
- the rising cost of labour;
- the general sense of entitlement of Australians; and
- the danger of Australia pushing away vital investment (in the mining sector) because of all of the above.
You probably don’t need to read the actual text of Wayne Swan’s response. As usual, it included:
- something about billionaire self-interest hijacking the national debate; and
- something linking Tony Abbott and Gina Rinehart being linked like mash potatoes and gravy.
We get the point guys and frankly we are sick of hearing about it. There are a few bigger fish both Gina and Wayne need to tackle right now, like what the future of the mining sector looks like and how the wider economy will be impacted.
Hours before Rinehart’s speech was posted online, her fellow anti-mining tax crusader Fortescue Metals Group announced it was slashing up to 1,000 jobs and scaling back its expansion plan in order to save around $US1.6 billion and trim its sales in response to a slowdown in China.
The company’s chief executive, Nev Power, conceded the fall in the iron ore price had been sharper than anyone had expected and it is clear that new mining projects are not the guaranteed starters they were even three months ago.
That includes Gina Rinehart’s Roy Hill project, for which she still needs to raise billions of dollars’ worth of finance.
Self-interest would suggest that Rinehart should be much more worried about Roy Hill than this battle with Wayne Swan.
And self-interest would also suggest Wayne Swan would be much more concerned about how falling tax revenue from the mining sector might impact the Federal Budget.
RBA governor Glenn Stevens noted in his interest rate decision statement that the “downside” risks in the economy flow mainly from the sharp fall in commodity prices we’ve seen in recent months.
“Growth in China remained reasonably robust in the first half of this year, albeit well below the exceptional pace seen in recent years. Some recent indicators have been weaker, which has added to uncertainty about near-term growth. Around Asia generally, growth is being dampened by the more moderate Chinese expansion and the weakness in Europe.”
It’s also notable that Stevens commented that “most indicators available for this meeting suggest growth has been running close to trend, led by very large increases in capital spending in the resources sector”. This mining sector spending won’t change in the short term, but what about the medium and longer term?
That should give both sides of politics plenty to think about as the next election approaches and the promises start to flow. As Alan Kohler argues today, Labor and the Coalition are already promising policies they simply can’t afford – if the Budget position deteriorates over the coming months, then we could have a very promise-light campaign next year.
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