Australia’s richest woman Gina Rinehart has been criticised by Prime Minister Julia Gillard for saying the nation’s economy is heading for a collapse like those seen in Europe.
The multi-billionaire mining magnate accused the majority of Australians of thinking mining companies were ATMs from which they could draw money.
The comments were made in a pre-recorded video message at a Melbourne business conference, the second time since September the famously private Ms Rinehart has caused national headlines this way.
She said that without mining and its related industries Australia had no hope of repaying record debt, to avoid the problems Greece and other countries faced with overspending and consequent debt traumas.
“What few seem to properly understand – even people in government – is that miners and other resources industries aren’t just ATMS for everyone else to draw from without that money first having to be earned and, before that, giant investments are made,” she says in the message.
“It is as if their (Europe’s) struggles with unemployment, riots, increased crime, debt and a sheer lack of money for even essential services, had nothing to teach us.”
The predicted demise of and recent job losses in the Australian car industry was a warning sign, she said.
Governments had wrongly believed the recent six year run of record revenues driven by high commodity prices would continue and had responded by imposing extra mining and carbon taxes that discourage investment, she said.
This week’s federal budget papers revealed net debt would peak at $191.6 billion and gross debt $300 billion in 2014-15.
However economists such as CommSec’s Craig James regard the forecast peak debt level of about 11.4 per cent of gross domestic product as low from a global perspective.
Ms Gillard slammed Ms Rinehart’s claims as “absolute nonsense”.
“(It’s) not backed in by economists and not backed in by ratings agencies with their triple-A rating of the Australian economy,” she told reporters on Friday.
Indigenous leaders also copped criticism from Ms Rinehart for recent demands that Woodside Petroleum pay them $1.5 billion compensation and provide jobs after the company pulled out of its $40 billion gas hub near Broome amid rising costs.
“This is spending the money of a resources company without giving even the company itself the chance to first earn it,” she said.
The benefits of mining went to all Australians, she said, demonstrated by BHP Billiton alone paying $9 billion in taxes locally last year, the same amount as federal funding of higher education.
Ms Rinehart also repeated themes aired in a poem she penned last year, about transforming Australia’s north into a productive agricultural and resources region, using low tax special economic zones as Singapore had under Lee Kuan Yew.
Australian Greens leader Christine Milne said she agreed there was an overdependence in Australia on the resources sector.
However she resented one of the richest people in the world – with a net worth above $20 billion – lecturing Australians about why she or anybody else in the mining sector should not have to pay taxes. – AAP