Share

Tycoon: Mining firms treated as ATMs

Sydney - Australia's richest person Gina Rinehart on Friday accused the government of using the mining industry as an ATM, warning of an unhealthy reliance on the sector and unsustainable debt levels.

In a speech to be delivered at the Australian Mines and Metals Association conference, the outspoken tycoon, chairman of Hancock Prospecting, cautioned that without reform Australia risked the debt problems faced by countries like Greece.

"Let's not be too proud to admit that we're really just a large island with a small population with record debt," she said, according to extracts of the pre-recorded speech.

"Plenty of Australians know this in a casual way.

"What few seem to properly understand -- even people in government -- is that miners and other resources industries aren't just ATMs (cash machines) for everyone else to draw from without that money first having to be earned and, before that, giant investments are made."

Australia's economy has been driven by the mining industry but the boom is approaching an investment peak and a bumpy transformation lies ahead as alternative sources of growth are sought.

Mining projects have faced headwinds from depressed conditions in Europe and the United States, softening growth in China and increased competition from other producers as well as falling commodity prices.

Earlier this week, the government revealed a significant plunge in revenues due to sluggish corporate tax earnings and announced an $18bn budget deficit for 2013/14, having previously forecast a surplus.

Rinehart said the government had been complacent in managing the commodities boom and its debt levels -- which are forecast to peak in 2014/2015 at 11.4 percent of GDP -- were unsustainable.

"It is incredible that after the last six years of record commodity boom times, we now find the once lucky country in record debt, with the budget tipped to deliver yet another deficit, to further increase our record debt," she said.

"Without mining and its related companies this country has no hope of repaying our record debt without facing the problems Greece and other countries faced with overspending and consequent debt traumas."

Rinehart has been a fierce critic of the government's mining and carbon taxes, saying that along with red tape and high wages it had made Australia "cost uncompetitive".

According to the Australian Financial Review, she was also to use her speech to urge Australia to borrow from the economic policies of Singapore, using low taxes to encourage investment and development.
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.87
+0.3%
Rand - Pound
23.84
+0.3%
Rand - Euro
20.38
+0.3%
Rand - Aus dollar
12.32
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders