Time to stop believing in the Magic Pudding

WHEN the dust settles after Australia votes on Saturday there will be one critical question that Hogsback would love answered: How could a government have got it so wrong about the country’s most important industry?

Tim Treadgold

The government in question is the one that developed a bad habit of swapping leaders midstream, the Labor administration of Kevin Rudd and/or Julia Gillard.

The industry in question is mining, with special reference to coal mining, once the driving force of the Australian economy but brought to its knees by a government that never really understood how the country works.

The key word in that previous paragraph is the last: “works”, because too many of the Rudd/Gillard policies of the past six years were not about work, they were about redistributing wealth from people it believed to be rich, to people who claimed they were poor.

In theory, and in a perfect democracy, there is absolutely nothing wrong with the rich sharing some of their good fortune with the poor. It is sometimes called the Australian way, or mateship, a belief that we need to lend a hand to those in need.

However, sharing wealth is not the first step in the process of managing a country.

The first step is creating the wealth, and that is where Rudd and Gillard ran off the rails, perhaps because they believed too much in a wonderful piece of Australian literature, The Magic Pudding.

In that Norman Lindsay classic a group of strange animals such a Bunyip Bluegum (a koala that looks amusingly like Kevin Rudd) and Sam Sawnoff (a penguin) share a never-ending pudding that miraculously reforms every time someone takes a spoonful.

Life, as we all know, is not like that. Someone has to make the pudding or, in the case of a country, create the wealth for everyone to share.

Mining is one of the few industries where Australia has a natural advantage over its heavily-populated northern neighbours. It is an industry capable of creating local wealth and work that can then be shared.

Until the era of Rudd and Gillard even the Labor Party understood the principal of encouraging hard work and fresh investment to generate the jobs that strengthened the country.

Former Labor Prime Ministers such as Bob Hawke and Paul Keating, in their more open moments, would acknowledge that a government could attack the most profitable parts of its economy and continue generating the wealth vital to paying for health, education and other essential services.

Sadly for Australia, the past six years saw the rise of a political belief that mining was an industry that could tolerate excessively heavy taxes and aggressive anti-expansion policies in name of forcing it to support failing industries in non-mining regions of Australia.

In other words, a policy evolved that would ultimately suck the life out of the industry that creates more of Australia’s wealth than anything else in order to try and compete with countries with ultra-low labour costs.

High-wage jobs in mining were to be swapped for low-wage jobs in manufacturing industries producing goods that could be bought cheaper overseas.

In time economic historians will look back at the appalling mess created by government attacking the best bits of its own economy.

One explanation for what has happened is that the Labor Party, in order to form government, needed an alliance with the Greens.

What Labor, a party formed by workers to ensure the protection of jobs in the sheep-shearing industry, did not understand (or refused to recognise) was that its Greens alliance partner was virulently anti-mining and therefore anti the very backbone of the country.

On Wednesday, Australians reading International Longwall News got a close look at the depth of the mess the once proud, pro-work, Labor Party got itself into when the Resources Minister Gary Gray praised mining and said how important it was to increase resource production capacity.

On the same day Gray’s political partner, Greens leader Christine Milne, called for a halt to coal mine development in the Bowen and Galilee basins in Queensland.

What a farce. One arm of the government that seems certain to be kicked out of office on Saturday says one thing. Its partner in power says the other.

Little wonder Australians are tired of this government. They have recognised the hypocrisy of what has been happening and want to get back to the simple and honest approach of rewarding hard work, sharing the spoils fairly, and encouraging the industry that makes Australia a rich country.