Western Australia must invade!

There is something very wrong with the east coast media when it fails to report the following from the WSJ:

Resource-rich Western Australia state will create its own form of sovereign-wealth fund to help store away earnings from the sale of vast quantities of iron ore and minerals to Asia, the region’s premier said Tuesday.

The investment vehicle will be comparable to the existing 73.07 billion Australian dollar (US$78 billion) Future Fund set up by the Commonwealth government in Canberra, which covers public pension liabilities, state Premier Colin Barnett said.

“The Treasurer will announce details of a Future Fund as part of the forthcoming State Budget and will introduce legislation to establish the Fund later this year,” said Mr. Barnett in his speech to the opening of the state’s parliament. “The Liberal-National Government is committed to ensuring future generations of West Australians have a legacy from this historic period of development, built predominantly on the significant but finite resources available to us at present.”

Western Australia is following the example of some oil-rich sheikdoms of the Middle East, which have led the way in accumulating vast assets in sovereign wealth funds. In doing so Mr. Barnett could put pressure on Prime Minister Julia Gillard’s minority Labor government, which has repeatedly rejected the idea of establishing a new fund to store away revenue from what some analysts describe as a “once in a century” mining boom.

It is time that the West Australian government learn another lesson from the Middle East: might is right.  For too long have the effeminate decisions of east coast dandies prevented Western Australia from fulfilling its destiny as not just Australia’s leading state but ruling Australia outright.

Consider. Here is a chart of monthly trade balances of the various states:

This situation is untenable for Western Australians. Their wealth is being siphoned off by the great eastern parasites who are living high on the hog at Western Australian’s expense. The West has been enslaved by the East for too long. It’s time for the wheel of karma to swing about.

Col. Barnett of the ruling Western Liberal Front must seize this historic moment. The East is weak. For decades it has descended into decadence as it used other people’s money to trade houses as if they were commodities. But they weren’t. They aren’t. The Chinese don’t buy houses by the megacarrier load. They buy dirt. Western Australian dirt.

Now, successive years of austerity in the mold of the European periphery has pushed a corrupt regime into historic decline. The peoples of the East are depressed, their houses falling in value, their hopes of a second and third investment property and retirement by 28 shattered. The utterances of Tim Colebatch are typical, dripping with entitlement and the degenerate neediness of the succubus:

The bottom line is that 77 per cent of the trend growth in spending over the year was in WA and Queensland, which have 30 per cent of the population. Only 23 per cent was in the rest of Australia, which has 70 per cent of the population.

Since the start of the GFC, Australia has added 92,000 jobs in mining and 62,500 in construction. But by November it had lost 127,000 jobs in manufacturing, almost as many as in the entire 1990-91 recession.

On current trends, there will be a lot more jobs lost in the cities where Australians live, where their partners work, their kids go to school, where they have their homes, their families and friends.

As Liberal senator Arthur Sinodinos and Labor’s Doug Cameron emphasised to Parkinson, the ”structural adjustment” that costs them their jobs has to generate new jobs where they live, not on the other side of the continent.

They are ripe for the picking.

I know Western Australia has no standing army while the East does. But think about it. A declaration of secession would instantly bankrupt the Eastern parasites. Their own army would be impoverished and starving within a week. A small and well drilled army of mercenaries contracted from Sandline  would be sufficient to demoralise the Eastern forces. A swift offer of improved pay conditions and free pies would see them flood across the border, leaving the East defenseless. Col. Barnett will ride a mining behemoth into the heart of Sydney, Melbourne and Canberra unopposed, to the cheers of local degenerates desperate for the liberation of employment.

Even as we claim our Eastern prize, the tactical seizure of Pine Gap would be sufficient to keep the US sympathetic to the Western Australian invasion and a quick declaration of loyalty to WANZUS would prompt the State Department to force recognition of Western Australian sovereignty through the Security Council.

Think on the benefits a moment. Canberran residents would be forcibly relocated to the Pilbara to become slave labour in the mines. The old city of this mock capital would be razed and the earth of its high plateau salted so as to become uninhabitable for a thousand years. The leech of mining taxes would be squashed permanently and rivers of gold will flow uninterrupted to Western Australians on both counts!

And it need not stop there. Our boundless riches can then finance Western Australia’s push into the Western Pacific. For too long have the sheep herders of the Kiwi Isle stood against us. There, peasantry knows no bounds, tilling the earth when it is there, virgin and prostrate, to be dug. Beyond that lies the Great Western Australian Empire!

The East is soft. It’s moment has passed. In its place must rise a new Australia, a Western Australia, a paragon of mining manhood, rippling with bronzed, pick-wielding vitality. A teutonic mining state upon which all will look and despair!



  1. The good part of the post is WA doing something positive with the mining boom, and Oz MSM not reporting it, and yet again we need to read US media of FOI in that country to find out what is happening in this one.

    I think you then must have read that Canada wants to setup a military base in Germany which launched the invade bit 🙂

    BTW WA host the SAS, Pearce RAAF base, Navy, and a host of other less publicised ones.

  2. Got to take your hat off to them for doing this. Maybe the WA govt is starting to realize the mining boom is coming to an end and they need to start saving what is left of the boom. At least they are taking the right steps. Not bad for some Sandgropers.

  3. With a big CAS they seem perfectly positioned to run a SWF, providing the communists in Canberra don’t dud them too much on GST.

    A secession would allow the west to properly benefit from the resources they own. The incentive at the moment is a bit muddled with Canberra thinking it owns WA’s resources. Just typical Canberra hyperbowl.

      • the chart in the article indicates a trade surplus so unless other financial flows outweigh then then there should be a CAS.

        • What has WA done different , they like the east have blown lot off the income on Houses. They just got lucky to have some minerals under them . If they want to fund a future fund. They can fund their own army as well. Whatever CAS they have will be a CAD.

        • Trade surplus != CAS. Given that WA has equally participated in the housing bubble and sold off the mines to foreigners, I would hardly expect WA to have a CAS.

  4. I’m all for it as long as they don’t try to impose their ridiculous shopping hour restrictions on us East Coasters. Are we allowed to keep our current timezones (and daylight savings) or do we all need to switch to WA time?

  5. There is something very wrong with the east coast media when it fails to report the following from the WSJ

    Which is why Gina needs editorial control of the Smage!

    BTW, Peter Martin told me that Colebatch is back at The Age after a long absence. Pretty much everything he writes is spot on. He is like the anti-Gittins. Do you think if they met they’d spontaneously annihilate each other?

  6. Always thought WA was the mystery country attacking us in Marsden’s Tomorrow series.
    Those driverless trains can be merciless.

  7. Tassie TomMEMBER

    The Sandgroper Army (refer to the Sand People from Star Wars) will station a Sand Person at every intersection in the eastern cities

    Only then will Colin Barnett reach behind his head and rip off his rubber mask to reveal that he is actually …. Hu Jintao!

  8. “There is something very wrong with the east coast media when it fails to report the following from the WSJ…”

    The WA SWF was announced in March last year, and the “east coast” media usually don’t bother with year-old stories.

  9. H&H don’t forget the SAS is based in Perth. Massive advantage as it would be pretty easy for them to secure canberra and allow Barnett to install Stephen Smith as his proxy.

    • Indeed, fantastic post HnH!

      It may be over the top but it contains quite a few salient points.

      WA is Australia’s Germany and I think you’re right in that there will be a shift in power once WA realises their position.

      Also, top marks for WA establishing a SWF. It should be bigger imo.

  10. Failed Baby BoomerMEMBER

    There is a sad ring of truth in this. The FIFO Bogans here in the West really do believe they are part of some glorious frontier, and they somehow deserve their easily-gotten overpaid riches.

  11. I see our conversation on the other story got you thinking HnH lol. I’m still calling for a mutual agreement with QLD first. They’re not quite as bad as the other eastern states and hold msot of the military, problem solved. :p

  12. I am reposting my post in “Links” for today.
    Sherlock and H&H I was wondering what part you found too drastic.
    Rememeber while you want to featherbed everything so people in the big cities don’t have any discomfort during a re-organisation towards a productive nation you are talking to a bloke who witnessed the destruction of rural Australia first hand. No one gave a stuff and still don’t. It’s only the people in the big cities that are of any concern at all!

    February 22, 2012 at 6:31 am

    Tim Colebatch in The Age

    As Liberal senator Arthur Sinodinos and Labor’s Doug Cameron emphasised to Parkinson, the ”structural adjustment” that costs them their jobs has to generate new jobs where they live, not on the other side of the continent

    Read more: http://www.theage.com.au/opinion/political-news/mining-states-bake-while-the-rest-shiver-20120221-1tlmu.html#ixzz1n37XccON

    Colebatch, Sinodinos and cameron don’t get it.
    To re-orient the economy towards production and away from debt based industries involves dislocation.

    The society and Govts of all colours have torn the economic and social heart out of inland and Northern Australia with blind narcissistic popularism. There could have already been sizeable towns and cities in the inland around which could be built the new industries associated with mining around.

    Keating in particular made the decision that everyone would live on the coast in large expensive cities rather than have a geographically diversified population.

    The only solution is to fix (or semi-fix as per something like Jack’s idea) the dollar, smash the Carry trade, raise interest rates, slow (at least) Foreign takeover of everything,put a dagger through the heart of the housing/finance beast and keep twisting it there for a long time to really kill it, remove the FBT tax on improvements mining companies make in regional areas, smash the overbloated production inhibiting part of the Govt sector, then let’s get on with it! (I’d love to find a way of getting a jagged edged blade into the heart of corrupt organisations and institutions such as the LAW but I haven’t worked out how to do it effectively! Unless I’m dictator)
    We will need to support people. We will need to share the pain around. That sharing should not be achieved through the destruction of private property rights as is the current trend. That road is a disaster and leads to extremism….sorry…it IS extremism totally lacking morality!!

    February 22, 2012 at 6:58 am

    That’s a touch drastic, isn’t it?
    Houses and Holes
    February 22, 2012 at 6:59 am

    Sure is

    • +100 Flawse

      particularly like the “put a dagger through the heart of the housing/finance beast and keep twisting it there for a long time to really kill it”,

      The other issue though is to get the Pilbara and the Kimberley to create their own regional government so that people moving there are not paying 800 to 900k for a four bedroom house. Cant have those public sector parasites in Perth being subsidised by the Pilbara

      • Yes Jack. We have to have people in these places. In times past the mines used to build towns and in towns already established they would provide outstanding facilities and lots of housing.
        This is all now subject to FBT of course so it cannot happen.
        We need a real Regional attitude for Aus instead of this Sydney/Melbourne centric attitude. It’s probably still a surprise to a lot of city people that there are forms of life west of the Great Divide.

  13. In 1930 a state government led by Sir James Mitchell was elected on a platform for secession. In 1933 he put a referendum to the people of Western Australia asking whether it should withdraw from the Commonwealth. The people overwhelmingly voted to do so – by a margin of two to one.

    It would win by the same majority today.

    Failed Baby Boomer – There is nothing stopping you from moving to the best state in Australia and joining in the fun. We don’t set the wages mate, we just earn them.

    • dumb_non_economist

      This isn’t directed at you, but it was changes to IR law that allowed the unions to procure those wages rates you mention, which made me vomit when watching workers crowd around those reptiles on the back of a truck some time back. For other west ozzies, for how many decades did the east coast subsidize WA?

      I’m for one tired of the argument, why does everyone seem only interested in gaining an advantage over everyone else. I always thought this was one country.

      • DNE
        The question of who subsidises whom is a bit complicated. WA has always been a mining agricultural state so always oriented to exports.
        We have run a CAD for 50 years which indicate the dollar has been too high for most of that 50 years. That is a simple transfer of income from exporters to other sectors.
        Further, the whole financial, legal, Govt, system has been centred in Sydney and Melbourne. How much does the rest of Aus contribute to the lifestyles of the Sydney and Melbourne population through that particular drain?

        • the problem is the currency markets are dominated by speculators. Forex volumes dwarf what is necessary for settling and hedging world trade. So, while in theory currencies should adjust to remove these imbalances, in practise they never do because instead of providing liquidity to the market, speculators ARE the market. Thus, another added factor that contributes to endless CADs.

        • dumb_non_economist

          Now I’m only going by memory of what I recall reading in the msm back in the 70’s etc. But, that was annually there was the usual public “discussions” about the Commonwealth distributions to the states. My memory was that per head of pop WA generally received more than the ES’s. Various annual arguments are what I think lead to the Comm. Grants Commission. I wouldn’t have thought back then that the mining over here was contributing anywhere near as much as it is now, least I don’t recall that being the case back then, but one of us having our cap out for a handout, I may be wrong, but anyway we should be one country.
          This is not a comment on how the country has been treated. So I agree with the Royalties for the Regions, as long as it isn’t pork barreling, oh well, good luck with that, I suppose!

        • dumb_non_economist

          I’m not as strongly anti resources as you may think. However I there are some things I sort of dislike about some of the parties on both sides of the fence. To put it into words would take too long for my two fingers for what would only take 5 min in words! So I’m sorry, you’ll have to remain intrigued!

  14. Epic piece of writing H&H.

    Col. Barnett is cheekily referred to as the ‘Emperor’ in our glorious daily press, I suspect he does have some awareness of his unchallenged supremacy in the Australian political sphere.

  15. Funny stuff HnH. Can anyone explain to me the point in setting up a SWF when you’re just one state in a federation? Won’t the grants commissions just say ‘well obviously they don’t need as much fed / gst funding, so we’ll slash what they get next year’? Seems likely to be self-defeating.

  16. Davo I know nothing about who rules what in Federal State arrangements so I won’t comment on that.

    From a macro perspective i see it this way FWIW
    So if they are going to create a fund they either must cut state Govt expenditures or raise extra taxes. Presumably the former is out of the question so we are dealing with the latter. So WA increase Royalties. If they are able to do so within the legal framework under which the mines were established…fine!

    The question then is what are they really going to do with the money. Will it be the same as the fake ‘future fund’ (It makes me sick to call it that…another great big Govt lie by Costello) which simply allows the Fed Govt to expand its expenditure rather than set aside appropriate consideration for Public service salaries?
    In which case we will have taxed more and gained nothing. In fact we will be further behind as all expenditure by Govt results in imports so our CAD/Foreign Debt/ National Fire Sale gets worse.

    If the money is spent on infrastructure aimed at boosting exports it is a good thing long term (generally). However the short term is more inflation in the cost of projects as that side of business is already stretched. Secondly again we get a short term boost to the CAD that we have to borrow to cover.

    Alternately let’s say the WA govt actually either buys up foreign companies or buys foreign assets how does that effect Australia?

    Again Aus is still running a CAD with no end in sight. So any funds that are sent overseas have to be replaced by other borrowing or asset sales.

    The third option is that WA raises the tax, gets the money and does absolutely nothing with it….no depositing it in Banks, nothing. No harm done except extra royalties paid by miners. Maybe they could buy Gold! As if there isn’t much in the ground over there!

    • The funny thing is that national savings is the way to have a lower exchange rate without raising interest rates – good for exports and business investment in general. It’s simple arithmetic. CAD is serviced by exports and debt – so if you save and lower the debt component there is less available money to be used for imports and so the dollar goes down to the level where the debt still being issued can service it. At least that’s my understanding of basic economics.

      You can spend when the riches end and you need the income – like Norway.

      • Mark…but how do you get the national saving without higher interest rates. You have to be very careful you are actually generating savings on not just imposing an extra tax on business or using the savings to replace Govt expenditure so that more of it can be wasted on their favourite social programnes.

  17. Great piece. Cracked a smile to start the day.
    As a long term WA resident, I just don’t see it.

    Barneys SWF has little hope of ever getting off the ground. There’s always someone lobbying for roads/hospitals/stadiums…. with the same ” In a state as rich as WA why should we put up with substandard (insert appropriate ‘worthwhile’infrastructure )”.

    Politically, the next election will be about vote buying, ‘same as it ever was’ ‘same as it ever was’ (apologies to Talking Heads).

    There is so much talk about population growth which is stretching our infrastructure beyond its capacity, but I see little discussion about what happens when the resource ‘wheel’ turns.

    Perth is the most isolated Capital in the world. Over the past 20-30 years, industrial production has shipped East and eventually off-shore.

    When the wheels fall off the mining wagon, how many of these people are going to stay here? What will be here to support them? Not much I fear.

    Boom towns/cities have sprung up and decayed all over the world. Perth will (in time) be the same.

    Barney is right to have a SWF but ‘it ain’t gunna ,
    ‘appen’. Canberra will see to that and there’s the out for Barney, someone else to blame!

    ‘Regressive Realist’ rant over.

  18. WA could simply start repaying all the excess funds they’ve received over the last 110 years to assist in their development, with interest. When the PV’s of the in and outs are equal they are welcome to secede.

    The Iron Ore in the Pilbara will be gone in 50 years.
    “According to the Australian Bureau of Agricultural and Resource Economics, that resource is being used up at a rate of 324 million tonnes a year, with rates expected to increase over coming years. Experts Dr Gavin Mudd (Monash University) and Jonathon Law (CSIRO) expect it to be gone within 30 to 50 years (Mudd) and 56 years (Law).[28]”


    Which brings me to what is a big macro issue for Australia – Resource depletion, it’s economic impacts, how we prepare for it and its impact on intergenerational equity.

    • Which brings me to what is a big macro issue for Australia – Resource depletion, it’s economic impacts, how we prepare for it and its impact on intergenerational equity

      Solution: she’ll be right mate. We’ll sort it out later. We’ll adjust.

    • “The Iron Ore in the Pilbara will be gone in 50 years.”

      …we go back to lower grade magnetite and steel will cost more. As mining haters here love to point out, there is no shortage of iron on this planet (unlike oil), and as mining supporters respond it is just a matter of extraction cost.

      • Very true, there’s plenty of iron ore in Australia and the rest of the world.

        Now if we were an oil rich nation, I’d almost be in favour of Australia becoming a resources-only economy, because (as Hugo would know) there ain’t much oil in the world, and its not easily substituted.

        Unfortunately Australia has deluded itself that the world will pay ever higher prices for red dirt that’s plentiful in the Earth’s crust, and this justifies the destruction of our trade-exposed sectors.

        Whether it ends because of a China bust or a global supply response, or both, the iron ore boom is temporary.

        • ‘…the iron ore boom is temporary’ and following that line of thinking so must the ‘destruction of our trade-exposed sector’ also be temporary.

          Swings and roundabouts baby!

          • dumb_non_economist

            But, wouldn’t the cost of returning to the base of what has been destroyed a factor and the ability to do it elsewhere for the same start-up costs as here, or cheaper, be a determining factor as whether or not you can rebuild what you have lost?

          • Firstly, the ‘destruction’ is much overstated.

            Secondly, outsourcing and offshoring of a range of manufacturing and services has a similar effect.

            Thirdly, just as the resources companies are investing strongly in infrastructure at present, so to must other sectors if they believe it to be in their business interests.

    • That is absolute garbage.

      There is enough iron ore in the Pilbara for another 200 years. I wouldn’t listen to what ABARE has to say

  19. Another Biggest issue for Australia is the stuffed up system that plays right into the banks and debt providors of having State govt’s responsible for 70% of the services and the taxing powers for only 25 to 30% for the revenue. This was changed post ww2 and as far as I am aware Ken Henry is the only one to have a go at addressing it. It comes up every couple of years in the senate but nothing is ever done.
    In NSW at the moment, the state govt is going to have to take public ownership of the Waratah train manufacturer at a cost of 170 million. In the meantime one of its assets Pillar which provides admin for about a dozen super funds exceeding 100 billion in total FUM looks like it may end up being sold off.ut yeah she’ll be right we will leave to the next bloke.

  20. dumb_non_economist

    I think Colonel Colin ought to dig “Colin’s Canal” very soon, but somewhere further east of the Fitzroy and in an almost N/S direction and the complete length of the state, I mean island. This will keep the cane toads out!

  21. innocent bystander

    “When the wheels fall off the mining wagon, how many of these people are going to stay here? ”
    which is why it is FIFO and not just FI

  22. With WA state debt at around $12 to $15 billion at present and projected by the WA treasury to hit $20 billion within this decade, WA will have to raise taxes or royalties sooner or later to pay it off.
    Yes at some stage the iron ore boom will deflate, but exports will continue. However there is no manufacturing in WA and what little industry, farming we have here will not support the population nor the level of debt WA is incurring.

    Its not only WA that will suffer but the whole of Oz will too. The labor government is offering reduced business taxes, more super for ‘working families’ and other goodies to the voters based on assumed mining tax income. There won’t be the money to pay for these goodies, if the boom fades and if they are to continue, all Australians will have to pay higher taxes.

  23. Hells bells Anton…excuse my ignorance but I didn’t know that. I thought WA mustn’t be in bad shape. Qld is horrid.
    We could all go broke paying State and local Govt taxes.
    How the hell are they going to raise a fund while running a state deficit?
    “Resource-rich Western Australia state will create its own form of sovereign-wealth fund to help store away earnings from the sale of vast quantities of iron ore and minerals to Asia, the region’s premier said Tuesday.”

    It’s just a publicity stunt! It probably deserved the degree of seriousness HnH gave it!

    • i wonder if there is a single labor MP smart enough to point this out.

      considering they’re a labor MP, not likely.

      • I did catch ABC Radio around midday with Deputy Opposition Leader Ben Wyatt raising the issue of rates of returns on the SWF vs. the interest on WA’s billions of debt.

        Accused Barnett’s SWF plan of being a ‘thought bubble’. Pretty perspicacious for a Labor MP!

    • dumb_non_economist

      Yes, and then watch West Australians whinging about subsidies and watch the royal finger in return from over east!

      • Labor state MP was on tv tonight blaming Barnett for not spending enough on Perth road and rail infrastructure. He wanted them to double it!