29/05/2012 - 09:26

Analysis: Gina Rinehart's big win for Australia

29/05/2012 - 09:26

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The greatest revenge is outrageous success, as Gina Rinehart discovered last week with two big wins, one financial, the other personal – and with Australia itself the ultimate beneficiary

Approval to import foreign workers was the financial victory because it means Rinehart can now proceed with confidence that her 70%-owned Roy Hill iron ore mine should be built on time and within its budget.

The personal triumph was in demonstrating how foolish it was of the Australian Government to launch a class war against the rich who, while having their faults, are the people who ultimately create jobs.

Australia itself will now get to see that when government works with the mining industry, rather than abusing it, everyone wins from higher levels of tax revenue and employment opportunities that will flow across the country.

The political sideshow accompanying the Roy Hill visa deal will soon be forgotten, though questions will continue to dog the Prime Minister, Julia Gillard, about why she initially feigned ignorance of what had been discussed at the highest levels of government more than two years ago.

What the Roy Hill visas really demonstrate is that Australia is being confronted with a choice of either embracing its role as supplier of goods and services to emerging Asia, or becoming an irrelevant backwater trying to prop up industries which cannot compete on the world stage.

Union resistance to the visas, which is as hollow as Gillard’s initial reaction given the role played by union leaders in designing the guest-worker system, has also exposed the problem of jobs being created in mining and its related service industries while they disappear in manufacturing.

For Australia, Roy Hill has become a landmark in the transition of the country to one that will become more like WA as the Asian industrial revolution gains strength.

What Rinehart has achieved, largely thanks to an absolute belief in the correctness of her actions, is to prove that the problem of Australia’s skilled labour shortage can be overcome when the benefits are spread widely.

Analysed dispassionately, it is impossible to find a loser from her Roy Hill deal. Winners include:

  • The Australian and WA Governments get a big new mine generating much-needed tax revenue.

  • Australian workers get additional job opportunities if they are prepared to move to where the jobs are.

  • Rinehart enlarges her already massive fortune which will be reinvested in more projects.

  • Australia’s under-populated and under-developed north gets a fresh boost.

Critics of the visa deal claim it will enable Rinehart to import cheap labour, an allegation that is false because all workers on the project will be employed under Australian conditions.

There is also a demand that Australian workers should get priority treatment when applying for jobs, which they will get because they are much easier to employ, if they want the work. Locals do not require guest-workers visas, and all the paperwork involved, and they can get to the construction site quicker, if they want to.

The reality of the Roy Hill deal is that its critics are playing a political and personal game which is nothing more than an extension of the class war started by Gillard and her Treasurer, Wayne Swan.

Their attack on the rich, fuelled largely by envy, was the equivalent of a phoney war which has now been exposed and discredited.

For Rinehart the victory is sweet, but not complete. She has made herself a larger target for her enemies by scoring a remarkable win, and at some point she will be forced to re-shape her business from its current status as a one-woman empire into a more conventional corporation.

That will mean relinquishing some of her decision-making power to hired help, something she will find very difficult because it will also mean exposing more of the inner workings of her business to public scrutiny.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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