Gina Rinehart, Australia’s richest person — tipped to reach the position of World #1 — has penned a curious and revealing op-ed for the latest edition of Australian Resources and Investment magazine. In it, she expands on a vision that has long represented her Shangri La: a northern Australian free-trade zone, unencumbered by taxation and populated by plentiful temporary labour from overseas.
Rinehart’s editorial and, by extension, her desire for a northern libertarian paradise, is motivated by opposition to the Labor government’s proposed carbon and mining taxes, which demonstrate, Rinehart says, a "fundamental lack of understanding of how the resource and mining sector operates". It’s curious for the reason that, like Rinehart’s previous writing on the topic, it’s almost devoid of statistics or evidence of any kind.
There are two main thrusts to her arguments in favour of the free-trade zone.
First, new taxes from the federal Labor government are killing investment in mining, forcing companies offshore and slowing the breakneck pace of the boom — you’ve heard this all before, and the enormous profits posted by companies like Rio Tinto, XStrata and Rinehart’s own company, Hancock Prospecting, should be enough to wipe the tears from your eyes at the plight of our struggling mining executives.
Rinehart’s second point is more bizarre and is a stalking horse for her real desires, if not those of the industry at large. Australians don’t want to live in sweltering Northern Australia where all the goodies are buried, so we need to regulate them less, tax them less and cut payroll and company tax, stamp duty and the like to make it more economically attractive to relocate. Failing that, we should "…consider the terrible plight of very poor people in our neighbouring countries in Asia. We should, on humanitarian grounds, give more of these people the opportunity of guest labour work in Australia."
We might also be able to provide adequate services for the disabled, elderly and war veterans, Rinehart says, if we were permitted to bring in Asian guest workers.
If you can move past the mindbogglingly shameless rent-seeking of a woman tipped to soon be personally worth $100 billion, whose philanthropic efforts have mainly taken place offshore (with the exception of naming a school hall after her mother, obviously), there are a couple of big holes here.
Financial incentives to work in mines are already ridiculous. The average wage in mining is $149,000 and tradies can usually earn more. Pay incentives are offered for workers who stick around for a year or longer in many cases. Expenses are frequently paid, and the notorious variations on FIFO (fly in fly out) mean workers don’t have to live on site permanently.
Yet there is still a shortage of semi-skilled labour in the mining sector. Turns out people have other reasons aside from economic ones for choosing where they live. The FIFO lifestyle not only impedes take-up of jobs in the sense that shift-work and camp living precludes family and community engagement, but it wrecks nearby rural communities that are quickly becoming mining-company vassals.
Anecdotally this is common knowledge, but one academic report published in the British Journal of Criminology on the topic of FIFO violence paints a more thorough picture: acute housing shortages, endemic alcohol-fueled violence and resentment of FIFO workers by locals is the rule, rather than the exception.
So when Rinehart talks about mining companies supporting communities and proposes a free-trade zone to incentivise growth, we should keep in mind that the huge financial incentives for young men to work in the mines are the cause of many mining communities’ woes, in turn making it less attractive for others to move up north.
All the chest-beating about community development, economic incentives for Australians and the like is just wrapping for Rinehart’s real desire: to bypass all the costs associated with luring Australians to the NT, or training locals, and the direct and indirect costs mining has to bear from FIFO, by importing massive quantities of semi-skilled (read: unskilled) guest workers. After all, guest workers eliminate the need for the ‘fly-out’ part; just fly them into the camps and leave them there until the ore’s dug up. Plus, you don’t have to pay them $200,000 to weld for you.
I’ve written previously about the new Enterprise Migration Scheme tailored to do just this, and the lack of scrutiny over its ethical implications. But Rinehart’s comparison of choice — Singapore — is another good case study for why guest workers will always be exploited to fuel economic booms. In Singapore, writes Peter Mares in Inside Story, "unskilled temporary migrant workers do not have the right to marry, or cohabit with a Singapore citizen or permanent resident. Female non-resident workers have to undergo mandatory pregnancy tests every six months, with the threat of immediate deportation in the case of a positive test result". Truly, as Gina says, "attitudes need to change before we can achieve Singapore’s fortunate and compelling position".
In the trade-off between individual rights and economic gains, Mares says, "migrant workers may be willing to do so to an extent that is likely to be considered unacceptable". Like, for instance, living in mining camps in the NT, receiving a ‘humanitarian’ wage from Rinehart and co.
Spurious proposals for a Northern Australian free-trade zone have everything to do with labour, little to do with incentivising exploration and nothing to do with community building. If it weren’t being pushed in mining-owned publications and the SMH’s opinion pages, where Rinehart has a $50 million stake, there’s a good chance we wouldn’t be hearing about it at all.
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