Amid growing fears of a recession, Federal Treasurer Jim Chalmers announced on June 28 that the $4.2 billion (US$2.8 billion) surplus forecast for the 2022-23 budget will be higher.
Key drivers of the improved budget position were understood to be, among other things, higher tax revenue and stronger commodity prices than forecast by the Commonwealth Treasury in May.
The common factor to the improved budget position federally and the seemingly strong WA state budget position is commodity prices from mining, with one of the crucial contributors being Hancock Prospecting Pty Ltd, led by its executive chairman, Gina Rinehart.
At the ceremony, Rinehart was lauded by outgoing Premier McGowan for her “outstanding contribution to the state and national economy.”
Indeed! One could say that Rinehart has been hard at work saving the entire Australian economy through her mining activities.
However, such a statement, while true, does not do justice to Rinehart’s contribution to Australia more broadly, as well as her undoubted business acumen.
It is well understood in WA business circles that, at the time of its founder, Lang Hancock’s death, Hancock Prospecting was not in the best financial shape. There was particular concern over the Roy Hill mining tenements.
Rinehart went against that advice and turned the company around.
Roy Hill is now a first-class major iron ore mine, creating jobs both directly and indirectly for thousands of people, and is an award-winning US$10 billion flagship project for Hancock Prospecting.
Mining Is Australia's AdvantageRinehart penned a piece for the Spectator Australia this month, pointing out the long-term damage we are doing to this nation by constantly demonising mining as “evil” and “dirty.”
She wrote: “If we want our standards of living to continue, we simply must have more investment in mines, and more mines developed. For that, our governments must better understand mining and put policies in place that actually welcome, not deter, investment.
“Kids need to be reminded that we all need mining, be that for mobile phones, iPads, refrigeration, air conditioning, electric vehicles and more. And that Australia wouldn’t have our high living standards, envied by those around the world, who would love to have our natural resources and the opportunities they bring.”
“Canberra Hill is not a wealth creator or nation builder, but a user and waster of taxpayer funds, an inefficient disperser of taxpayers’ funds, and its record shows a place which fails to understand economic realities,” she said.
“This lack of economic realities has resulted in policies which restrict our pensioners, students and even veterans from working as much as they may choose, while there is a widespread worker shortage, a worker shortage crisis, affecting many businesses and supplies.”
At a time of record revenue, thanks to mining, one would expect government services to be provided abundantly and efficiently.
Unfortunately, the opposite is the case. Notwithstanding the money flowing into state government coffers, the standard of the provision of services, which is the key role of state governments, has never been so poor.
And there are record energy prices, which will continue to rise, thanks to, as Rinehart pointed out, the government’s plans to stop coal mining and coal-fired power plants and effectively stop investment into more gas and production with their price caps.
Rinehart’s warnings are timely, and governments—state and federal—which owe their fiscal position to her should take heed.