Gina announces 3d1k award

From the AFR:

Mining billionaire Gina Rinehart has offered a $50,000 bounty to a representative of the resources industry who best promotes mining in the face of “far left or non-understanding media attacks”.

…“We need people and we have some who are prepared to be unpopular or very unpopular in some areas of our media,” Mrs Rinehart said.

…The recipient of Mrs Rinehart’s new award will receive $50,000, of which $30,000 must be used for “standing up for our industry”. The winner can use the rest as desired.

Surely the winner is already obvious. Step forward our resident astroturfer!

David Llewellyn-Smith
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Comments

  1. …“We need people and we have some who are prepared to be unpopular or very unpopular in some areas of our media,”

    A topic she knows well.

  2. It really is like the Wild West. “I’ll give y’all $50,000 to shoot the Sheriff”. You now what I mean.

    • There is a relatively small price premium to pay for political stability in coutries like Australia. (apart from the ethical considerations which seem to fall by the wayside)

  3. In all seriousness, I can’t think of a better candidate than the indefatigable 3d1k.

    A leatherbound commentography would make an excellent nomination and a vital edition to every home. Next to the works of King James and Margaret Fulton. 🙂

  4. In the interest of balance and I know that MB strives for a balanced, nuanced debate, I think the World Economic Forum’s Report on Competitiveness (2012-2013) needs to be considered seriously. The WEF report was quoted by Gina and to look at it soberly, it does contain some real concerns, whatever your political ideology.
    “After losing four positions to faster-improving economies last year, Australia retains its rank of 20th and score of 5.1, just behind Korea. Among the country’s most notable advantages is its efficient and well-developed financial system (8th), supported by a banking sector that counts as among the most stable and sound in the world, ranked 5th. The country earns very good marks in education, placing 15th in primary education and 11th in higher education and training. Australia’s macroeconomic situation is satisfactory in the current context (26th). Despite repeated budget deficits, its public debt amounts to a low 23 percent of GDP, the third lowest ratio among the advanced economies, behind only Estonia and Luxembourg. The main area of concern for Australia is the rigidity of its labor market (42nd). Indeed, the business community cites the labor regulations as being the most problematic factor for doing business, ahead of red tape. In addition, although the situation has improved since last year, transport infrastructure continues to suffer bottlenecks owing to the boom in commodity exports.”
    Real areas of concern are;
    “The most problematic factors for doing business are
    Restrictive labor regulations; Inefficient government bureaucracy; Tax rates; Tax regulations; Access to financing Poor work ethic in national labor force.” These negative factors are attributable to Government Legislation or the LACK thereof.
    (The Global Competitiveness Report
    2012–2013 World Economic Forum)

    • This may be a naive question, but does it really matter for Australian citizens how rigid our labour market is if Australian workers are amongst the best paid in the world? It’s just that I’ve noticed that “labour market flexibility” tends towards euphemism for lower wages.

      • It’s more a euphemism for increased wage disparity.

        The money won’t disappear, we don’t compete.

        We sell dirt that has been endowed by nature, and all our domestic markets are duopolies.

        For increased profits, you need to take it away from the workforce at the point of remuneration, we’re too useless to sell to 3 billion customerss on our doorstep even with free(er) trade.

        • Oh, we have houses with lifestyle to sell to the top1% of those 3 billions, but for the rest, you are right. When someone talk about competitiveness, they mean the Chinese wages and standards. This is what makes the capital competitive. Then comes the question: Do we all live on this Earth just to be able to make more profitable the business of the top 1%? And this is the only lifestyle we can offer to our children?

          • I think this sort of inversion of values is what happens when money-culture ethics come to dominate a nation’s zeitgeist.

            Certainly, as this chart shows, Australia compensates its labor well:

            http://www.bls.gov/news.release/ichcc.t01.htm

            But shouldn’t that be something to crow about?

            From across the Pacific, I say good on you Australia.

          • 3d1k, I understand perfectly what we are into. The problem is that most people don’t understand it. I have studied all those consequences decades ago, when people were still dreaming about globalization. It is so easy to predict all those consequences, if one study the right economics and philosophers. Today people are drawn in an ocean of information, but they are thirsty for genuine knowledge. We don’t have awareness of what are the roots of all problems.

            The video is just awakening after decades of heavy drinking. I wasn’t drunk during that time, but observing the unfolding of the events with enormous intellectual curiosity. Those who have lived in two worlds know better what is right and what is wrong with both of them. If you know only one world, you can’t compere and can’t make any judgment and objective analysis.

          • 3dk1,

            If anything is in a bubble it’s those youtube videos where concepts are explained using a drawing pencil.

    • When your labour market has to pay the worlds highest costs of shelter, you’re already starting on the back foot for competitiveness.

      • I think you are both making great points – yes we are some of the best paid workers in the world, but the costs of living are also so high – especially as you have stated – Housing/Shelter. But, I think Australian’s are out of kilter with the rest of the world – look at the Teachers of Victoria – Who want more money for less hours – great in principal if you can get it, but disturbingly foolish when American counterparts get half of Australian Teachers pay. Am I saying that wages in Australia have to fall? No – freeze them and drop the prices of Houses would get us back to competitiveness . I am sadly of the belief that a GFC2 will force the hand of the Australian Government & Business and the average Aussie wage earner will say WTF just happened, we have not experienced the pain like they have in the USA, Europe & the UK.

        • Jumping jack flash

          “… but the costs of living are also so high – especially as you have stated – Housing/Shelter …”

          It is chicken and egg in my opinion.

          Our costs of living are high because they can be, because of our high wages. Utility companies charge what they do because people pay it. Banks lend large amounts of money to push up house prices because people have lots of numbers written on their paypackets to service it with.

          Cut wages and watch costs of living ratchet down. There will be a transition period of course.

          However this is moot, banks would not allow wages to be cut significantly across the board to lower costs of living.

          How they would do this is lobby against the lowering of minimum wage, and bring out the dreaded “D” word – “such a move would be deflationary”.

        • dumb_non_economist

          Neil, I have family in the US and their cost of living is much lower than ours from food to housing to transport, especially outside the main pop centres.

        • Clarification – Bingo for RP and

          “When your labour market has to pay the worlds highest costs of shelter, you’re already starting on the back foot for competitiveness”

      • Could someone explain to me why tax rates are such a problem when Australia has some of the lowest taxes in the world, as this graph illustrates?

        Because they’re greater than zero.

        • “Could someone explain to me why tax rates are such a problem when Australia has some of the lowest taxes in the world, as this graph illustrates?”

          glen,
          Comparisons like this in fact are meaningless. What DOES matter is how every tax dollar is spent. That is where the debate and effort needs to be. Setting priorities, getting value for money- STAYING WITHIN YOUR BUDGET, cutting costs. This is what matters ie the expenditure of Govt.

          I know this doesnt sit well with those who believe Govt is a wealth distribution mechanism, but the economic realities of what is facing Australia dictate that the case for wasteful Govt expenditure should be sent to the trash, where it belongs.

          • Comparisons like this in fact are meaningless.
            No they’re not. They provide a relative measurement mechanism against other countries with similar objectives and traits.

            Setting priorities, getting value for money- STAYING WITHIN YOUR BUDGET, cutting costs.
            The point here is that the budget MAY NOT BE BIG ENOUGH because as a country WE HAVE A RELATIVELY LOW LEVEL OF TAX REVENUE.

            I know this doesnt sit well with those who believe Govt is a wealth distribution mechanism, […]
            Government _is_ a wealth distribution mechanism. Some of this takes the form of services (eg: Police), some of it takes the form of money (eg: baby bonuses).

            That is the point of Government. To pool and redistribute the resources of a group of people to provide benefits to all.

            […] but the economic realities of what is facing Australia dictate that the case for wasteful Govt expenditure should be sent to the trash, where it belongs.
            Some of us don’t consider things like comprehensive publicly funded education and healthcare to be wasteful Government expenditure.

      • It is an issue of who pays the tax as well as the total amount of tax. I believe the argument is that taxes on business and employment taxes are higher than for our competitor nations.

        Whether this is true or not I do not know. However, I do know that a lot of countries with higher overall tax incidence rely much more heavily than Australia on consumption taxes.

      • errr … I not doubting she works hard, but I don’t know for sure, but didn’t she get a few hundred million in her fathers estate? maybe I’m wrong, but I would agree most rich people have a killer instinct…well the ones I know.

  5. Mod: tone it down Mav please.

    Just a reminder, the comment stream is not for personal attacks, but constructive criticism only. Comments will be moderated or deleted that add nothing to the conversation.

  6. Oh to be a billionaire’s man whore.

    Pleasure me and I’ll give you 50k, but you can only spend 40% on yourself.

  7. Although I have been in Australia several years, I am still sometime completely baffled by what I see and read.

    Firstly, why the childish need to always refer to Ms Rinehart as “mining billionaire Gina Rinehart”

    She makes a valid point about competitiveness within her industry, referring as an example to the low wages in Africa, and immediately the prime minister and her finance minister retort with the complete non sequitur, that she is somehow suggesting that “Aussie workers” should be paid similarly.

    Non of the press point out the wrongheadedness of such asinine comments, let alone the sheer political clumsiness.

    Personally as a new Australian I feel insulted by such comments, which imply I’m stupid enough to accept them.

    No wonder she wants to buy the comic and run it her way.

    Business is what it is, and it will boil down to cost, whether that hurts our socialist sentiments or not. If Africa/South America start producing cheaper ore through cheaper environmental costs or whatever, we are effed, and there won’t be a mining industry to worry about any more.

    We don’t have the remnants of an empire to piss away through nationalising the industry, like the UK did, ……and look where that ended up anyway.

    • South Africa? They can keep the wages down by sending in the army and kill any worker who dare to ask for a payrise. Most Australians believes in morality and human rights, so that is our competitive disadvantage.

      • I’m American, but have lived in Mexico for the past 12 years, one of the low-wage countries.

        Even though internal police repression in the US has increased greatly over the last 40 years, I still don’t think people in the US-NATO sphere have the slightest clue as to the level of police violence and repression that is used in these low-wage countries to keep the proles in line.

      • Agreed, do we really want to run our country like an African nation? I can’t think of one success story we should use to benchmark ourselves against.

        Australia should be focusing on value adding and technology rather than exploiting natural resources for the benefit of the few.

        • Botswana perhaps? Owning most of your natural resources instead of selling it off to foreign owned companies is not a bad model, if your economy (like ours) is nearly completely dependent on a mining boom.

          Just remember, Africa is not one country – its probably the most diverse continent on the planet, in terms of culture, geography, peoples, political systems etc.

          Plenty of success stories there, amidst a lot of failure and heartache. Lots of inspiration and lessons to be learnt.

          • Quite right TP. Lots to be learned from the experiences of resource rich African countries and some great succeess stories happening there now as well.

            Something to bear in mind as we go about growing our economy. Africa provides Capital lots opportunity and choices.

        • Look at Lynas for a classic example on how to screw your company. It’s not always rosy to do stuff outside of your country.

    • Give it a rest.

      If she gets her special economic zone and we “embrace multiculturalism and welcome short term foreign workers to our shores” what do you think will happen to wages at these mines?

      • I think the idea has some merit.
        Why are there oodles of unemployed Aboriginal males on welfare in the same regions that mine labour costs are escalating.

        Something like this could encourage the development of a new Australian city (over time) on the north-west coast (for example) ala Hong Kong.

    • At least in part this is what is known as “tall poppy syndrome”. In the USA, billionaires are lauded as examples of the American dream. Here they are often derided as scabs getting rich by exploiting the workers.

      It is partly jealousy at someone else’s good fortune, partly suspicion that the wealth is ill-gained, partly political. Note that the odium is reserved for the “billionaires of the moment” – currently Gina Rinehart and Andrew Forrest. James Packer doesn’t get a guernsey. Rupert Murdoch only gets one by proxy, with the bile directed at his newspapers in Australia. As for Ivan Glasenberg, Frank Lowy, Harry Triguboff, Anthony Pratt, John Gandel, Angela Bennett and Michael Wright, Kerr Neilsen and the other dozen or so, even many MB readers have probably only heard of half of them.

      • “In the USA, billionaires are lauded as examples of the American dream”

        Some are, some aren’t.

        “Here they are often derided as scabs getting rich by exploiting the workers.”

        Some are, some aren’t.

        Sweeping generalisations do not advance your case and may well diminish it.

        • True. Generalisations are what they are. A more nuanced analysis might be more convincing, but would probably be too long for a blog post.

          • Alex,
            I think you have depicted the tall poppy syndrome quite well. Fanned of late by no less than our Govt.

            Shameful.

      • At least in part this is what is known as “tall poppy syndrome”.

        No it’s not.

        Tall poppy syndrome is when the genuinely talented and extraordinary are criticised for their achievements.

        This is about a woman who was born into fabulous wealth, multiplied into even more fabulous wealth by little more than luck, saying things like:

        “If you’re jealous of those with more money, don’t just sit there and complain. Do something to make more money yourself – spend less time drinking, or smoking and socializing and more time working.”

        • Always have to take the bait, don’t you? Your characterisation of Ms Rinehart is no more than prejudice masquerading as considered opinion. Plenty of other people have inherited as much as she did and pissed it up against the wall. Exhibit A: Rodney Adler.

          • Your characterisation of Ms Rinehart is no more than prejudice masquerading as considered opinion.
            Which part is opinion ? That she was born into fabulous wealth ? That she was lucky enough to have the right kind of wealth at the right time to benefit from a worldwide resources boom ?

            Which of those two factors – by far the most influential in her success – do you think required skill and talent ?

            Plenty of other people have inherited as much as she did and pissed it up against the wall. Exhibit A: Rodney Adler.
            So not pissing it up against a wall is an amazing achievement ?

    • She makes a valid point about competitiveness within her industry, referring as an example to the low wages in Africa, and immediately the prime minister and her finance minister retort with the complete non sequitur, that she is somehow suggesting that “Aussie workers” should be paid similarly.

      Difference is the politicians run an economy, not a business.

      How many Australian customers, what will be their aggregate demand, if they accept African wages and working conditions?

      Gina may capture more, but she can’t consume more… even though her waist line shows it looks like she is trying real hard.

      Business, by its very definition, is sociopathic. It can’t express any emotion, and many factors of a civilised society, which we all savour and enjoy, can’t be measured by the quantitatiev metric of the parameters of business.

      That’s what politics is, it is the realm where these parameters outside quantitative measures are found, and fought.

      Business needs to be protected from itself because of its in adequacies.

      Non of the press point out the wrongheadedness of such asinine comments, let alone the sheer political clumsiness.

      Journalism in Australia is a duopoly. Who would have thought it would be of poor quality.

      Personally as a new Australian I feel insulted by such comments, which imply I’m stupid enough to accept them.

      Some people feel equal despair about journalism in Australia. Some even grouped together and form a new media outlet called ‘Macrobusiness’ to be a competitive provider of content.

      Welcome aboard.

      Business is what it is, and it will boil down to cost

      Civil unrest and revolutions are what they are, and it will boil down to a lynch mob kicking down Gina’s door at 1am.

      This debate is about proportion, and nothing else.

      Some classes lack a sense of proportion.

    • Gripper, the point is that Gina has stuck her head out of her box and told the Australian public that they earn too much.

      Yes, $600 a week is too much money. This from someone who probably doesn’t know how much a loaf of bread or a litre of milk is, let alone the cost of renting a squeeny flat in one of our major metro cities. She’s also complaining that she has to pay too much for workers hence her push to bring in Chinese labour into the Pilbara; all the while she pretends she’s saying these things as a crusader for ‘better business’ but in reality people see that what she’s really after is more money for Gina. Naked self interest. Full-stop.

      Gina is plainly demonstrating she’s even further removed from ‘ordinary’ Aussies than the French aristocracy. She says “Cake is too good for the working poor” and then expects people to love her for it?

      Whoever is advising this woman needs to tell her to stop putting her head up and spouting this rubbish… all it’s doing is making her look like a selfish greedy billionaire that would put Monty Burns in the shade.

      • I disagree, it’s all the procyclical stuff you’d expect to hear during a mining boom.
        But what’s going to happen if the tide eases out we’re going to see who’s been swimming naked. Already Fortescue and Tinkler are having to change plans.

  8. Thank you friend and sparring partners here at MB for your warm commendations. In light of the overwhelming support, I graciously accept nomination.

    Friend and sparring partners, I am sure you will share in the delight I experienced when advised by organisers that a typographical error inadvertently led to the omission of a zero at the end of the sum to be awarded. Conditions in regard to amount to be spent “standing up for our [marvellous world class] industry” remain as stated.

    As we all know both the pursuit of truth and generosity of spirit embedded in the resources sector knows no bounds.

    Thank you all.

    • darklydrawlMEMBER

      Heh, I am living the great Aussie dream and have been working for a mining services company (after many years in CBD Corporate land) and lovin’ it. I’d vote for ya 😉

    • I’d vote for you!

      Don’t agree with your stance regarding mining tax but I do agree that mining is a blessing for Australia… with only the slight nuance that it needs to be managed correctly.

      Plus, you’re funny as. 🙂

    • She’s getting a right flogging all over the place. Zero Hedge is hilariously ruthless.

      She has her lapdogs in Bolt and McCrann doing the heavy lifting and it doesn’t seem to be working well, so I don’t know what she thinks $50k would buy.

  9. “The main area of concern for Australia is the rigidity of its labor market (42nd). Indeed, the business community cites the labor regulations as being the most problematic factor for doing business, ahead of red tape…”

    Oh for crying out loud Australia already has one of the most casualised workforces in the industrialised world, behind only Spain perhaps (2). Anymore flexibility and we’d all be walking around backwards with our heads shoved firmly up our own orificies. Wait a minute! We’re already walking around like this, anyway, aren’t we…..

  10. Well,….still a bit baffled.

    its nothing to do with benchmarking to an African economy, accepting their ethics, or even insulting fat people.

    It is simply a matter of accepting the reality of the situation, if business becomes too uncompetitive in a world market, it dies, whether we like it or not.

    That is a reality we have to face and deal with.

    Talk of lynch mobs/come the revolution ….or whatever, seems a bit pointless.

    If other countries with less rigorous employment or environmental laws threaten our mining industry, it is a relevant point of discussion, whether anyone chooses to do anything about it, or just lie down and accept it.

    Maybe there is nothing that can be done in a modern Australia, man cannot ascend to a higher state of innocence and all that.

    After all what has China done to much of the western worlds manufacturing industry.

    All this talk about IR laws (thought IR stood for interest rates), workers rights, and the general “US AND THEM” mentality that still seems to pervade much of Australian society and industry, its a bit like I have time travelled back to the 1970’s UK scene.

    Or am I missing some sort of ‘retro irony’? and you are really all way ahead.

    • its a bit like I have time travelled back to the 1970′s UK scene.

      You may have hit on something there. So many of the louder voices in our union movement seem to be UK ex pats.

      • Quite right Alex.

        I think they subscribe to the ” My job is done here” philosophy and now exploit the greener more ignorant pastures of Australia.

      • Alex: Lol. Something that you cannot fail to observe, especially entertaining when rejecting notion of foreign workers.

        Gripper: Definitely shades of the 70s in rhetoric shunted around the political sphere headed by none other that The Worlds Best Treasurer. The focus on Rinehart’s point that in order to compete with other nations (citing Africa in resources sense) we need to strategically target future economic growth strategies. Much contained in WEF report is relevant, not to be ignored or passed off by the PM as solvable by throwing more money at education, kidding ourselves. As you say, look at global manufacturing, much of which has shifted to low cost international providers – there are many areas we may find ourselves over-rewarded and reluctant to face competitive realities in a global environment. Anecdote: a big gas project here in Perth, first of its kind – much of engineering technical (but not all) undertaken in US and France – same work at cost per worker of USD100k+ cheaper. As Dalia Marin has warned, not even the services sector will be immune.

      • Yup, mainly Scottish judging by the accents.

        Having reduced Clydeside to an economic wasteland with their work to rule etc, they no doubt sought out sunnier climes in which to exercise their particular brand of “progression”

        My grandfather was a Clydeside ship builder in the 30’s, came here for work as a ‘ten pound jock’, before returning for the war, and subsequent economic decline.

      • +1, as a recent migrant to these shores. The flashbacks to the UK of 30 odd years ago are undeniable.

        The whole Grocon thing here in Melbs being a case in point. It just would not happen in the UK today.

    • Unlike manufacturing, mining cannot be ‘offshored’ since the stuff is physically in Australia. The biggest benefit of operating in Australia is political stability and the rule of law, and a company will not have their mining rights stripped away. If Australians are to accept $2 an hour, will Rinehart also accept having all her asset confiscated and reassigned to a government minister?

      • Certainly Australia has marvellous natural resources, but it does not have the monopoly, plenty of iron ore etc in Africa, South America and Siberia.

        What Australia has had over these is relative political stability. Where it could lose out is cost of doing business.

        Which do you see as the more likely to happen, better stability/ability to work in these other countries, or the cost of extraction going down in Australia, and a concomitant drop in living standards?

      • Kill two birds with one stone – make her Natural Resources Minister in the upcoming Abbott Government LOL

  11. Irony is Gina’s set back the cause of the mining industry for the next 20 years purely by her own bone headedness. The megaphone and truck effort should have been enough but she has just kept ploughing on. The mining industry should be fronted by cool headed business people with all stakeholders’ interests at heart, not this politically driven rabble that have taken it upon themselves to speak for the mining industry and only end up embarrassing us all with short sighted, self interested and incoherent monologue. Somebody get in her ear, please.

  12. “If you’re jealous of those with more money, don’t just sit there and complain. Do something to make more money yourself – spend less time drinking, or smoking and socializing and more time working.”

    “Australian mining magnate Gina Rinehart has criticised her country’s economic performance and said Africans willing to work for $2 a day should be an inspiration.”