09/12/2014 - 05:11

Freedom in the eye of the beholder

09/12/2014 - 05:11

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When the times were good we could afford to ignore some of our self-imposed economic shackles.

Freedom in the eye of the beholder
PODIUM FINISH: The Fraser Institute found WA’s economic freedom was outstanding compared with most nations and Australia’s other states.

How is it that, barely a month after Western Australia was found to be among the most economically free places on earth, we hear the mining sector screaming about red tape?

One of those voices must be wrong, surely?

In October, Subiaco-based economic education foundation Mannkal teamed up with Canada's prestigious Fraser Institute for the local launch of its annual Economic Freedom of the World report, which ranks 152 countries on the basis of key measures such as the size of government, soundness of the monetary system, legal and property right, regulation, and the ability to trade internationally.

According to the Fraser Institute, if WA were an independent nation it would have ranked as the third highest level of economic freedom in the world behind Hong Kong and Singapore. For the record, Australia was eighth.

This was very good news for WA and worthy of being taken seriously. The Fraser Institute has become a well-accepted guide on such matters following 18 years of such publications. It is also seen as a leading expert in judging the regional attractiveness for resources investment, so its understanding of our economy is top notch.

Yet the recent news around minerals development has been, in my view, dire and at complete odds with both this report and economic reality of falling commodity prices.

This month, the Environmental Protection Authority decided against even assessing a proposed Mineral Resources iron ore project in the Yilgarn region about 100 kilometres north of Southern Cross that involved satellite mines, called J5 and Bungalbin East Iron Ore Project, near the Carina project run by its subsidiary, Polaris Metals.

The step is the latest in a series of actions by the environmental watchdog in the adjoining Mid West region east of Geraldton after it rejected Sinosteel Midwest Corporation's new mine pit at its Blue Hills Mungada East project last month, and increased its calls in October to preserve Mungada Ridge, an area in which Karara Mining had proposed a new iron project.

As a born and bred Western Australian, one of the hardest things to hear is the view that there is no environmental value in our great wide-open spaces. Of course there is. But we are not, as the Joni Mitchell famously sang, talking about paving paradise to put up a parking lot. Most mine sites are merely a pinprick on the map of this vast state.

Mining companies in this state are adroit in dealing with environmental challenges and, as we all know, much of what appears unique in the WA landscape can be found nearby – it's just that no-one seriously looked before.

The EPA's timing is, of course, shocking. At a time when commodity prices are collapsing and project proponents are scared to stick their necks out, these brave few are smarting from decisions that would have brought some much-needed construction projects into WA's ever diminishing pipeline of new work.

It is therefore timely that billionaire iron ore magnate Gina Rinehart has renewed her call for the federal and state governments to curtail overregulation of the resources industry.

It also should be recognised that when the Economic Freedom of the World report was launched, the Fraser Institute's Fred McMahon warned of complacency that could imperil WA's prosperity in light of new and great challenges, with commodity prices likely to remain weak and thus unable to bail us out of future difficulties.

Mr McMahon had already stated that complacency caused by the boom had allowed a number of flawed policies to be implemented or perpetuated and economically dangerous situations to develop, including labour market barriers, deficits and poorly directed spending and potential housing market problems.

And that still earned WA third spot. Economic freedom, it seems, is easier to have when times are good.

Now it is getting tougher and, if we want to maintain the wealth that economic freedom brings, we need to loosen up a little and make sure our entrepreneurs can get things done.

Anchor Foods

Last week we looked at Western Australian business dynasties and, amid the names past and present, one that was kept to the side was Anchor Foods.

The Fremantle-based food producer has had a long running connection with WA and most who grew up here would be familiar with the brand, especially through its key products such as flour and vinegar.

I recalled the surprise I felt in 2002 when David Clapin bought the business from Goodman Fielder.

At that time we'd written many stories about the branch economy, reflecting on the sell-out of WA brands and businesses to national players to the effect that this state simply was losing decision-making capability and all the economic benefits of having companies headquartered here.

In many ways Anchor Foods had been an early signal of the branch economy, yet here was someone buying back the farm, so to speak.

Last week I received a great book about Anchor Foods about its 160-year history. Intriguingly, what I had presumed was a WA company was actually started in Adelaide as a merchant in 1854 and only managed a toehold in WA in 1891. After that it appears that this state became the driving force of the company as it joined in WA's growth and diversified into manufacturing here.

At some stage, which is not totally clear, it became a WA business.

That, as they say, is history. The most important thing is the company appears to be a force in the WA food sector again.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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