New resources minister talks it up

From the ABC:

Mr Frydenberg said he’d work hard with northern Australians, to get the best possible outcome for their communities and industry.

“The skill set I bring from my previous treasury portfolio, and before that, as the parliamentary secretary to the Prime Minister for deregulation, these will be very helpful skill sets for this role,” he said.

“I look forward even to working across the political divide with my opposite [Labor’s resources spokesman] Gary Gray, to provide the best possible outcomes for our north, and for our energy and resources sectors.”

Mr Frydenberg comes into the portfolio at a challenging time. Iron ore receipts have plummeted along with the Chinese share market, and coal prices have halved.

But the new minister is upbeat, saying he views sees the current situation “as a glass half full”.

“There’s enormous opportunity for our country with the continued industrialisation of China,” he said.

“Sure, we’ve come off the super cycle, that will be a challenge.

“But I think if we can boost productivity here in our domestic industry, capitalise on the free trade agreements and the reduced tariffs and the opening of new markets such as China, and if we can capitalise on the lower Australian dollar, then the future for that sector is pretty bright.”

Jeez mate, I hope you’ve got more than a glass half full of crap to bring to the portfolio. The industrialisaiton of China is over. What lies ahead is consumerisation. Chinese tariffs on resources aren’t falling (they will rise before long as China fights to retain local production) and the market is mature not new. The lower dollar versus the US is something, yes, but the Aussie is still way up against all of commodity competitors meaning we’re losing the market share battle.

The future for the sector and for Northern Australia is massive contraction as global demand keeps slowing and cost-out develops into a raging plague. Unless you’re prepared for that, minister, then you’re not prepared at all.

Comments

  1. In the meantime he should do some educative reading.
    The Northern Myth,
    Bruce Davidson, pub.1963.

  2. Frydenberg now thinks it is the most exciting time to be alive for Australians. Wonder where he got that.

  3. At least as a lib, he is only that far behind.

    If he was a National Party minister for Northern Australia, his priority would be to boost the defences of Darwin because he just heard of the attack on Pearl Harbor by the Japanese.

  4. by 5.00 this afternoon Frydenberg will solve the refugee crisis in Europe and then have a cure for all airborne diseases, ensured 100% numeracy and literacy for all children everywhere and help his kids with their homework.

    • Nyleta, thanks for the heads up, Just sent an email to that PJP mob re my rail track.
      I might owe you a beer or 3. WW

      • They are trying to get Glencore to extend the life of the Mt Isa smelter.

        http://www.abc.net.au/news/2015-06-04/legislation-changes-to-allow-continued-mount-isa/6520830

        But they are shutting copper capacity in Africa already

        http://www.bloomberg.com/news/articles/2015-09-19/glencore-copper-cuts-drowned-out-by-china-woes-as-rally-fades

        If the smelter shuts the amount of sulphuric acid trains on the Townsville — Mt Isa rail will be a problem for Phosphate Hill, already Mt Isa acid has dropped off and I don’t know the real capacity at Sun Zinc.

      • Nyleta
        I was in the offices of the copper smelter last year and the place looked like a rubbish dump, already they are moving out and the shutdown of the copper smelter is a done deal.
        You will be aware of the “unfortunate” fate of Cudeco at Clonkers,
        the lead smelter is in trouble and the work roster is changing to 7 on 7 off, which means the workers will move to the coast and commute.
        the graziers are in trouble up there as well, so the whole town is going into recession.
        Glencore is laying off many senior administrative staff from the ISa and that work is going to Brisbane.
        So it looks like the end for the Isa.
        This rail line was not intended to service the Isa, but for other purposes.
        Keep up the good info. Thanks WW

  5. Frydenberg is meant to be one of the smart up-and-comers. He backed Abbott in the leadership ballot. Enough said.

  6. Anyone who is cognisant of what is coming and actually lets on disqualifies themselves from the job. The most accurate analog of our parliamentarians is GM execs before the bankruptcy. Speaking and acting as though the bankruptcy was impossible was a requirement, right up until the instant it occurred.

    Given Australia’s coming depression, denial is a requirement of pollies, and will only stop when it is obvious to everyone that the depression has arrived. Exactly the same thing happened in the US until 2008. People simply can’t handle the truth and will attack anyone who dares uttering it, and will blame the utterance for the disaster that followed. Our belief in animal spirits and the confidence fairy reflects this.