Hey, big spender

BOTH sides of politics like to splash around (our) money. If they must, why can’t it be on something useful, such as a national mining agency, asks Robin Bromby.
Hey, big spender Hey, big spender Hey, big spender Hey, big spender Hey, big spender


Staff Reporter

Can’t make a car factory pay its way? No problem, Canberra will be there with a cheque.

Need some rational thinking and planning for the future of the country’s mining industry? Deaf ears are turned in our nation’s capital and doors slammed tight.

Any day you pick up a newspaper – if, indeed, you’re one of the diminishing breed that still buys and reads them – there is a good chance some rent-seeker will be at it, calling on the government to support this or that industry or some group in society.

Both sides of politics are up to their necks in pork. Julia with the income distribution plan of the century (lightly disguised as a carbon tax) and Tony pandering to aspiring mothers with better paid (by us) parental care.

They even see to our entertainment, if that is quite the word for what the ABC and SBS pump out, to the tune of well north of $1 billion a year.

But I have a better idea. Let’s take a leaf out of the Singapore book (without the political repression) or the Japanese book (but without the required servility).

Restore the idea of government being there to participate in long-term projects and steer money toward development – and future productivity that will, unlike all the welfare and handouts, actually generate tax revenue in the future.

If Japan can have the Japan Oil, Gas and Metals Corporation why can’t we have something similar?

JOGMEC is all about Japan’s self-interest. It manages stockpiles of critical metals. On the other side of the business, the corporation has, since 1975, worked to develop exploration technology.

From 2001 to 2005, for example, JOGMEC concentrated on remote sensors and a data acquisition system using high-temperature superconductor devices. It finances exploration around the world to ensure resource security. It has poured money into investigations of minerals on the seabed.

There is someone in Tokyo who has put some brain into this.

We need a national agency, incorporating the work of Geoscience Australia but with a national plan; an agenda for mining and downstream industries.

Otherwise we are going to remain nothing more than a quarry. As our manufacturing crumbles, we need a new direction to fulfil the “clever country” promise.

I’m not suggesting a return to the 1930s when Canberra banned iron ore exports because it was thought that Australia did not have enough for its own steel industry. I’m just asking for someone – anyone – in Canberra to think how Australia can parlay its natural resources into greater wealth.

This thought started germinating a few weeks ago with a columnist in The Financial Times who, while being a true free enterprise man, thought that airlines should be an exception. He pointed out that those great successes, Singapore Airlines and Emirates, were created by governments.

You cannot extend this argument to many of the sectors where, in fact, the government does interfere. Going back to New Zealand, various governments let the car industry go to the wall, but New Zealanders still have plenty of choice when they want a set of wheels. But close down their airline and how many carriers will come in and offer daily flights on all the key routes across the Pacific?

It seemed to me that this had some parallels with the mining industry.

For some years, I have advocated the creation of a strategic reserve of minerals.

But I think we can be bolder than that (even though the stockpile idea should still be pursued as it will return handsome profits when scarce metals rocket in price in the years ahead).

If Gillard and Abbott – and their indulgent spending proclivities are equally bad – want to throw around public money, then they should throw something at the resources industry.

For goodness sake, with a GDP of around $1.6 trillion can’t we be a little smarter? For a government with $350 billion to play with each year, can’t we move to the next level rather than being the region’s quarry?

It’s called investing for the future. And we are squandering that future.

*A version of this story was first published in the April 2012 edition of Australia's Mining Monthly