Money and power sometimes walk hand in hand. When Malcolm Turnbull enjoyed a seat in John Howard’s cabinet, he was by far the wealthiest individual to hold executive power in this country. Turnbull’s opponent when he was Opposition Leader was Kevin Rudd, wealthy himself. Rudd was easily Australia’s wealthiest prime minister, thanks largely to the fortune amassed by his wife, thought to be worth around $56 million in 2010.
Of course, there’s wealth, and then there’s wealth. The Turnbull fortune, while comfortably north of the $100 million mark, only just squeaks in to the BRW’s list of Australia’s richest people. If you really desire the riches of Croesus, you’re going to need a net wealth approaching something like Gina Rinehart’s $20 billion.
Take a moment to savour that number. Roll it around on your tongue. The average Australian full-time ordinary wage is approximately $68,700, according to the Australian Bureau of Statistics. That’s not the median wage, either, by the way, which is lower, but rather the mean.
In contrast, Rinehart’s income is thought to exceed $1 billion a year, or an astronomical 14,556 times the average. It’s an amazing figure, dwarfing the largest pay-packets ever handed out to Macquarie Bank executives in pre-GFC days. The Western Australian mining magnate is now worth more than Facebook’s Mark Zuckerberg, and she is fast catching up on Bill Gates, who is in the process of giving away most of his fortune via the Bill and Melinda Gates Foundation. We are approaching the time when Georgina Hope Rinehart could be the world’s richest person.
Unfortunately, all that money hasn’t bought respect.
Rinehart is not particularly well known outside of Western Australia. To most ordinary citizens, she comes across a simply another wealthy mining boss, perhaps one with slightly more manners and style than a Clive Palmer or a Nathan Tinkler. At least as far as we can tell, Rinehart herself believes that mining in general, and her own efforts to develop iron ore resources in Western Australia’s Pilbara in particular, are not given nearly the credit they deserve, especially by the snooty chattering classes over east.
And she might be right. In general, Australians don’t regard our billionaires with anywhere near the same respect — sometimes adulation — that the Americans bestow. Perhaps that’s because extremely wealthy Australians are much stingier when it comes to giving their money away: rates of philanthropy for high-net wealth individuals in this country lag well behind those in the US.
In any case, whatever we think of Gina Rinehart, it seems as though we’re soon going to get to hear more about what Gina Rinehart thinks of us. This is because Rinehart has bought into Fairfax Media, Australia’s oldest newspaper company, and the home of most of the nation’s best respected broadsheet mastheads, such as The Age, the Sydney Morning Herald, the Canberra Times and the Australian Financial Review.
Precisely why Gina Rinehart is buying a stake in Fairfax remains a mystery. Neither Rinehart nor her company, Hancock Prospecting, have issued any comment on the move. Rinehart simply issued instructions to her broker, and bought up stock worth about $180 million. Her investment takes her stake in the company to roughly 14 per cent, making her the single largest investor in the embattled media group, and putting her in a strong position to gain a seat on Fairfax’s board.
Why would a mining magnate want to own a stake in a newspaper company? Rinehart’s sudden interest in media is not without precedent. She also owns a tenth of the Ten Network, having bought in during the latter part of 2010. She also sits on the Ten board chaired by Lachlan Murdoch. Since joining the board of Ten, she has reportedly lobbied strongly for more conservative news and current affairs programming on the network, apparently either suggesting or strongly supporting the move by the broadcaster to offer high-profile conservative columnist Andrew Bolt his own television show.
As ever with Rinehart, however, all this is essentially hearsay. It’s very hard to know precisely what Gina Rinehart thinks — or even says. She doesn’t give interviews. She makes few public statements. The intensely secret billionaire reportedly disdains journalists and considers the media her enemies, according to the best recent profile of Rinehart, by Fairfax’s Jane Cadzow.
Cadzow’s article recounts a bizarre exchange between the writer and the spin doctors at Hancock, in which the reporter is upbraided for Fairfax’s apparently disrespectful coverage of Rinehart’s conversation with Queen Elizabeth (the article was entitled "Prince Philip Pokes Fun at Gina Rinehart"). Cadzow quotes a friend of Rinehart’s, who told the journalist that her attitude is that "all journalists are communists, and all media proprietors are weak".
There are some remarks that remain on-the-record, however. Rinehart gave a speech at CHOGM last year, for example. You can read it on the Hancock website, here (pdf). Apart from its clumsy prose and numerous errors, the speech is most notable for pushing Rinehart’s aggressive deregulatory, pro-mining, anti-tax sentiments.
Rinehart thinks it is far too costly and difficult to build new mines in Australia. She is against the mineral resource rent tax and the carbon tax, which she claims will "will diminish Australia’s attractiveness to foreign investment". (Luckily, the bosses at Korean steel-maker Posco apparently weren’t listening. They decided to invest $1.5 billion for a stake in one of Hancock’s iron ore mines shortly after this speech was made). She also wants to open up mining to overseas workers on short-term visas, and create "special economic zones" (read: tax havens) in the north-west "with policies conducive to opening and developing successful businesses, to enable more opportunity for exciting vision and development, with low taxation for those Australians who want to work and live in our north".
Such attitudes are commonplace among Western Australia’s corporate elite; indeed, some of them Coalition policy. Getting rid of the mining tax and the carbon tax are scarcely fringe positions, after all. The difference between ordinary businesspeople and Coalition voters and Rinehart is … well, it’s the money. "The very rich are different to you and I," remarked F. Scott Fitzgerald, "they have more money." And for no-one is this truer than for Rinehart, who has the wealth to buy up large swathes of the media and run it according to her own prejudices, if she chooses.
Given Rinehart’s attitudes and proclivities, many have understandably begun to speculate about whether she really does intend to take over Fairfax completely, and if so, whether she could exert control over the media company’s editorial positions. The answers, I think, are yes, and yes.
There’s not a lot of point of owning a stake in a failing newspaper business unless you want to use it as a mouthpiece for your own political ideas. Even Rupert Murdoch understands this: News Corporation has long subsidised under-performing media assets like The Australian and the Wall Street Journal precisely because of the political clout they contribute.
And the answer to the question of whether a media owner can drive the editorial positions of the media outlets she owns should also be obvious with reference to the Murdoch examples. As Jason Wilson points out in a perceptive piece at the ABC’s Drum, "journalists across the industry have less bargaining power than they once did, and there are fewer senior journalists around now to lead any putative rebellions. The news values in Fairfax’s online offerings and the subtle changes which are already taking place at the Financial Review show that it is difficult for journalists there to put a red line around quality or balance."
Wilson observes that media assets have long been owned by the rich seeking to monetise their power. "In Europe, and even in the UK," he writes, "a range of partisan newspapers across the political spectrum is an accepted part of the media system." Bottom line: if Rinehart took control of Fairfax, she could install whoever she liked to edit her newspapers. Those editors would take orders from the Chairwoman, and those reporters would have to toe the party line.
The move to take a stake in a media asset is all the more revealing for the way it departs from the normal ways corporations and interest groups attempt to exercise influence, like lobbying, advertising, branding and PR. All of these are much cheaper and more effective than buying up whole media companies. It’s simply not necessary to buy a stake in a media company to get your message across.
After all, if you really want to buy influence in Australia, the going price is peanuts. The mining lobby spent around $20 million in its campaign against the Resource Super Profits Tax; its most effective media presence was in fact a single salaried lobbyist, the Minerals Council of Australia’s Mitchell Hooke. Clubs Australia has managed to roll back poker machine reform for a lousy few million, ruthlessly targeted at Labor MPs. The total donations across all the Australian political parties, at $230 million, still only slightly exceed what Rinehart spent for a slice of Fairfax.
There’s also the issue of media regulation. This latest move could not have come at a more delicate time for the shaping of future media laws in Australia, with an inquiry underway into the media and the government working its way through its likely response to the recommendations of the Convergence Review. Rinehart has jumped the gun with her latest share purchase, and possibly tipped the Government’s hands.
A much smarter move, politically, would have been to wait for the dust to settle and then make a move once the new media landscape became clear. Now the government has a rolled-gold political excuse with which to tighten media ownership laws. It also gives the government an extra motive for giving more money to public broadcasters like the ABC and SBS, and perhaps even the community media sector.
In other words, from most business and political angles, Rinehart’s ploy doesn’t make sense. No, a move like one can only really be seen as the ego-driven manoeuvre of a wealthy amateur. Rinehart, I think, wants to be respected; she may even desire to be feared.
If that’s the case, she is well on the way to succeeding.