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Back June 7th, 2012 Forward
Today in the News

Okay, clearly I don't understand Big Business. There's an article in today's ABC newsfeed which is basically another round of the mining companies and the Business Council of Australia howling "we'll all be rooned" because things aren't going 100% their way. They're busy saying that the Australian economy costs too much to do business in, that it's too damn risky and too damn costly, and we should be altering our business to remove our "low productivity and outdated work practices".

They basically argue that resources projects here cost about 40% more than those on the Gulf Coast of the USA - and I'd argue that yes, there's any number of reasons for that:

1) I don't know whether they've realised, but Australia has a smaller population than the USA - we're about 1/15th the size of the US population, and we're at about the carrying capacity of the continent as it stands.
2) We're a bit more geographically isolated than the Gulf Coast of the USA - and certainly a lot of the areas where the resource projects are happening here are a lot further removed from large centres of infrastructure too.
3) We have different legal frameworks to the USA, being a different fucking country and all. This includes things like insisting that all staff be paid a decent wage and that things like environmental regulations and OH&S requirements aren't just optional extras that have to be dealt with if (and only if) you can't afford to pay off the inspector. Oh, we also don't have the concept of "at will" employment enshrined in our social support systems - so we ask that if people are going to be sacked, they're sacked for a reason, given a decent notice period, and paid their redundancy money. We also insist that the indigenous peoples of the location be compensated for any damage done to their tribal lands - and if you're not sure whether a particular location is part of the tribal lands, you can just submit a request to the Native Title Tribunal to find out, can't you!

They point to our labour being "35 per cent less productive" than the labour in the US Gulf Coast for projects near cities (it's up to 60 per cent less productive in remote locations) - and I have to admit I'd like to know what the yardstick they're using is, when the measurements were taken, which projects they're comparing and to what, and how they're categorising "near cities" and "remote". Or in other words, show me the figures, show me the original research - don't just give me the conclusions stripped of all possible context.

But the thing which really stuns me is the following:

"We are in a global competition for capital and in things like iron ore or in coal, we've got growing competition from other countries in the world. And if we become more expensive, or too expensive, then those projects may not occur or may go elsewhere," Mr Shepherd said.

It's the last bit, the notion of "projects going elsewhere" which really stuns me - what, do they really think it's possible to dig up the iron ore in Australia's north-west from say, Somalia? Do they really think that this petty bit of blackmail is going to succeed in basically turning around our entire culture and economic system, just in case one or two big companies decide they don't want to spend their money here? (Well, yes, probably they do. And what's more they're probably right in expecting it given the past track records of various Australian governments, which is depressing).

However, I'd point to a statement made by our PM fairly recently. Ms Gillard apparently located her spine, and pointed out to a whole heap of mining company executives that, contrary to their apparent belief (as expressed via their corporate behaviour) they don't own all the minerals in Australia. Instead, these minerals are owned in common by the peoples of Australia. Mining companies don't get freehold rights to the areas they mine. Instead, they're given mining leases. I think it's about time for the Government to grow a spine and basically point out to various mining companies that if they don't like the damn conditions here, they don't have to put up with them. There's bound to be someone else who's willing to pay the prices associated with doing business in Australia who'll come along and pick up the leases. Heck, if all else failed, there's still a chance that either the state or the commonwealth governments could go into the mining business themselves and start hauling in the wonga for all Australians, not just the shareholding few.

Australia has one of the most stable and productive economies in the world. We've managed to stay out of recession and actually had our economy growing for the majority of the time since we discovered that the US banking system had been playing ducks & drakes with the global money supply back in November 2008. We're a country which has a lot of resources available to exploit, we're also a country which is both tectonically and politically stable (we don't change governments with revolutions, we use elections instead) with a culture which is remarkably phlegmatic on a global scale (last reported riots were in Cronulla, back in 2005). When a company sets up a mining venture here, they don't have to factor in costs like bribes, armed guards, private armies, bodyguards for executives, or similar. They can generally rely on a lot of cooperation from both state and federal governments. We have a skilled workforce (even if it is a bit small for the demand being put on it at present). We have very good quality infrastructure, and we're willing to put money toward making it better (for example, the National Broadband Network project which is currently ongoing, as an effort to make it possible for just about everyone in the country to access high speed internet). If a mining company sets up business in Australia, they're going to get a good return on their money - mining here is nowhere near as marginal as, for example, farming.

They're just not going to get to keep all of it. We're going to ask for our share, in the form of wages, taxes, and so on.

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Current Mood: somewhat incredulous somewhat incredulous
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