Too much luck? The Mining Boom and Australia’s Future

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So, this is from a promo sheet for a new book –

Chile, a less affluent resource-rich country, has shown just how inept our politicians and economic experts really are. Several years ago Chile put in place a mechanism to ensure that its politicians didn’t blow the proceeds of the country’s lucrative copper mines. Any revenue above a set threshold went straight into tightly controlled sovereign funds. When the GFC came along, Chile was able to use the fund to deliver an even bigger stimulus to its economy than Australia did, without racking up a single peso of debt. Other resource-rich countries have similar policies. Norway, a country of only four million people, has saved more than $450 billion in just fifteen years. When its oil is gone, Norway will be able to live off the interest, thereby maintaining its enviable standard of living into the future. There are many other examples. The essential idea is to turn non-renewable resources into a financial asset that will last forever….

The Australian economy is now sinking hundreds of billions of dollars into expanding mineral and energy production. Our state and federal politicians have become so bedazzled by the prospect of even greater mineral riches that they are eagerly facilitating a resources stampede while giving less regard to long-term ecological and financial consequences. Increasingly, resource development in Australia involves weak and inept governments up against muscular multinationals that are prepared to go as far as removing political leaders to secure their interests. Such were the dynamics of the mining companies ‘ spectacular defeat of the super-profits tax. Without a fairer tax, Australia will continue traveling at breakneck speed towards the bottom of the quarry, a journey that will wreak havoc on the non-resource sector and potentially leave many people far worse off. As the resource boom accelerates, it will drive the dollar sky-high, forcing up the cost of doing business for everybody. Industries such as tourism and education – industries that, unlike mining, involve many jobs – will fade away. But what happens if commodity prices suddenly collapse, as they did with the GFC in 2008; or worse, when the resources run out?…. without a resources fund, we are stealing from future generations. Without such a policy, this mining boom amounts to theft on a scale never before seen in this country’s history.

Paul Cleary
Too Much Luck: The Mining Boom and Australia’s Future
Black Inc Books
August 2011
See also Laura Tingle’s brilliant “Falling Down the Miners’ Shaft.” “Mine, all mine, bwahahahaha”

And Guy Pearse’s Quarterly Essay “Quarry Vision”

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