05/09/2012 - 10:34

Nothing wrong with a bit of hard work

05/09/2012 - 10:34

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A couple of WA’s mining entrepreneurs have made prominent contributions to the political debate lately.

A couple of WA’s mining entrepreneurs have made prominent contributions to the political debate lately.

I HAVE previously written about how the mining tax debate has spawned a newly politically active business class in Western Australia.

This past week has reinforced that, with iron ore industry leaders Gina Rinehart and David Flanagan receiving publicity for their views.

Mrs Rinehart hit the headlines for reportedly writing in a magazine article that people on the minimum wage ought to work harder and socialise less. 

If you read the actual article (we put it on our website on Monday, and comments ran 14 ‘for’ and one ‘against’ her) this widely published summary is a distortion. Mrs Rinehart does argue that the minimum wage might be too high, but it was not particularly connected to the bit about smoking and drinking, which attracted the bulk of the criticism she received.

Her key point was that those who created wealth were the ones who created jobs, which was ultimately the greatest benefit to the poor.

Here is the context:

“Our mines still produce great wealth, but not enough anymore to subsidise class warfare, complacency, overspending and a bureaucracy whose power lies in saying no,” Mrs Rinehart said.

“Let’s get through the class warfare smokescreen.

“We need to regain our roots and encourage people to invest and build.

“There is no monopoly on becoming a millionaire; if you’re jealous of those with more money, don’t just sit there and complain, do something to make more yourselves, less drinking and social time and more work time, become one of those who work hard, invest and build, and at the same time, create employment and opportunities for others.”

That line is something we could all think about. Is each of us maximising the opportunity that this state’s rare good fortune is offering us? As University of Western Australia vice-chancellor Paul Johnson remarked at a recent WA Business News luncheon, we can throw the world’s biggest party as a result of our good fortune or we could put some of it away for the future.

Should we do that as individuals, or do we just demand that the government does it?

Last week, Mr Flanagan used his role as panellist at a resources luncheon run by Pitcher Partners to say much the same thing as Mrs Rinehart – that there was an increasing sense of entitlement in Australia and that those wanting handouts were no longer the people who needed them.

“There’s this feeling of entitlement, which is growing in our society, where so many people are just, sort of, saying to the government ‘I want free this and free that and I want you to just give me money and subsidise this and go ahead and tax those bastards’,” he said.

“The concept where people need to work really hard and take risk and save to build something, it’s kind of not celebrated the way it used to be in Australian culture. And I think everyone really needs to be an advocate for that.”

Mr Flanagan admitted he was speaking to the converted at the event, but that did not diminish the level of passion in his delivery; he is a man who means what he says.

Some attendees were inclined to speculate the Atlas Iron founder was making a positioning statement that might be part of a strategy to enter politics, following his decision to step away from an executive role at the company.

I have speculated on this before, both with regard to Mr Flanagan and another iron ore player, Andrew Forrest.

With a surprisingly small stake in the company – his actual shares are worth less than $4 million – the Atlas Iron chief might not have the resources of Mr Forrest or Mrs Rinehart, but that might make his wealth a smaller target should he ever fully commit to the rough and tumble of politics.

It would be fair to say at this point that, despite his obvious suitability as a candidate, Mr Flanagan has previously told me on the record that he’s not interested in a political career even though he has admitted feeling buoyed by his public involvement against the mining tax.

“When I saw hundreds of people coming up in groups to say this tax was a bad thing, it was empowering,” Mr Flanagan said in late 2010.

“We have the opportunity to make our voice heard and I think we should use it when those sorts of things happen.”

However, at the same time Mr Flanagan told WA Business News the intense scrutiny that comes with politics is a factor that puts him off. He also concedes that political life lacks appeal for other reasons.

“I think it’s easier for me to execute a business plan than politicians who have to constantly negotiate with countless factions and competing interests,” Mr Flanagan said.

“It’s not so hard getting alignment within a company and 25,000 shareholders.

“The biggest contribution I think I can make is to help execute good mines that help make Australia great.”

That sounds fairly definitive but, then again, there has been plenty of political drama in the past 18 months that might cause Mr Flanagan to rethink his position. All the scrutiny in the world hasn’t stopped Prime Minister Julia Gillard from running what many consider one of the most inept federal governments in this nation’s history.

It has been her leadership as a senior player in the government of her predecessor Kevin Rudd and as the current prime minister, which has energised more people in WA to become politically active that I can ever recall.

But if you think this is an argument about wealthy fighting off the so-called Robin Hoods, think again.

While the miners have had a particularly buoyant few years, most of those benefitting today worked for years, often decades, in an industry that offered little reward for the risk they took. Many could have done better sitting back and investing their time in Sydney real estate or media empires. You did not hear them demand that property moguls and media barons of the 1980s should be taxed more.

Instead, they knew that Australia had a fair-go mentality. You put in the effort and you get a chance to be rewarded. If you fail, there is a safety net, but nothing too cosy.

That has changed. Both Mrs Rinehart and Mr Flanagan are pointing to a different mindset, everyone feels they are entitled to more than they earn because they believe the country can afford it. These business leaders clearly see this as short term and destructive to the nation’s future.

I found an odd example of this issue when I was digging around for information about the National Rental Affordability Scheme, a federal program to incentivise private property owners to keep residential leases down for low-income people.

Not matter how well meaning this policy might be, I couldn’t help discovering that it has its downsides.

One blog critiquing the scheme had many comments for and against. It is always hard to place a value on the real worth of an anonymous blog comment but this one below was at the end of a long complaint about how a NSW state housing body took out the ground floor of a new apartment block, creating mayhem in terms of security for the tenant whose remarks I read.

“Frankly I was left to question why I should bother to work overtime and strive to achieve since in the end I lived in the same accommodation as people whose only contribution to society was a daily visit to the TAB and bottle shop,” was the commentator’s parting line.

Isn’t that what Mr Flanagan and Mrs Rinehart were talking about?

• mark.pownall@wabn.com.au

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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