Gillard hits out at Rinehart criticism

AAP

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.

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.

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Yaawwwwwn. ? Don't gillard's polls bounce if she is out of the country. Just saying...... :o)
Once more Gillard shows how badly educated she is, saying Rhinehart speech isnt backed by economists..or anyone else for that matter, as though if it were she would listen, Rhinehart has an opinion, so what, we all have opinions, what we expect for a leader though is intelligent leadership to a goal we feel is rt for us. Gillard simply does not offer such leadership...she can cry to order, she can lie to suit, she can promise all things to all men, but she cant lead, she cant inspire, even the duds of her own Government, she is anow a time served PM.
OK. PM says no way, GR says watch this space. Now lets look at what each person does for a living. How could a PM know anything about business unless they created a business?
GR collects royalties from dirt mining and she inherited the dirt. To date she's built nuttin' and mined exactly zero of anything. So, yeah, let's watch this space.
Julia, Julia, ooh a good name for a song, not really relevant to the subject but then again neither does anything Julia says.
Only 3 days since their supposedly election-winning budget, and they are back on the ropes again; Julia sounding more panicky by the day. Bill Shorten planning in the background to dump their carbon policy. Can those 2 independents put the rest of us out of our misery now pls.
No chance of the so called independents removing their support, they are comrades too, Labor and behaving like insiders.
With due consideration for Gina's considerable business experience growing a small fortune into a very large fortune and then considering what her critic has achieved, Gina wins the contest hands down. And she is right.
Gina grew what exactly? And, how did that come about? By crikey, there are some Ozites who love a story about inherited wealth, particularly when the inheritance allows the spawn to sit back and count the royalties from mining done by someone else.
A failure to understand that all money earned is eventually returned to the economy...maybe not the way you want but is returned. Insurance, workers compensation, land tax, the wages of the worker paid back into their communities, mortgage repayments, food and groceries, petrol, kids sport, education and art pursuits. Now if Gina or any other business person has to pay super profit tax from digging up the so-called Australian dirt, then why are multinational companies who are buying our farms and food resources not taxed the same, or the banks who produce nothing, or more to the point, heard Ged Kearney gloat that there are 2 million union members. Now if each member pays an annual fee of $100.00 to be a member, then how does the union spend $200million per year back into the community to help all Australians, or is it only the paying members that benefit? So back to your query...."Gina grew what exactly?", well I ask the same question of the unions and where is the Super Profit Tax on government income recorded. Me thinks not. Looks like the union family spawn, re Wayne Swan and his daughter who studied music get a start on Gillards staff, is alive and well. You begrudge family inheritance through worked labour and entreprenaural activity as opposed to hand outs from political class welfare.
The fact is the longer a socialist govt is in power the more they endeavour to make the electorate beholden to them. This is where debt starts and in time reaches a tipping point and voila Greece. The only thing separating us from Greece at the moment is resources and we are a big country in the right part of the world. It is imperative that we say goodbye to Julia in sept
Gee, you must think the resources industry is a mighty big slice of the Oz economy. What portion of GDP do you think it is, out of interest?
Generally I may agree with the ATM mentality of this government thinking of Australian Households as ATMs to raid to pay for extra programs. The treatment and presentation of the NBN is evidence of this - it is off budget because it is supposed to be a commercial venture yet proper business case and analysis is blocked and then not demanded by the Senate, and then the noncommercial political decision to prirotise the loss making parts of it first - the bush. Labor does not care, it is other people's money and it gives them some edge with the electorate who have not figured out that the NBN network is not free. Who is going to pay the potential 10s of billions of network losses of the NBN - just fund it from the ATM of households and business where other socialists tend to fund programs. Go ahead GIllard - attack attack attack. That is what you are good at. Blame others when things don't go right. Divide Australians when you should try to unify them.
Still bogged in the good ol' days of socialist boogeymen, I see. I'll give you a hint - there aren't any socialists left.
Reading about one right now...
No comment on NBN - every government, local, state, federal, labour or liberal, is going to waste taxpayer's money. That's a sad fact of life. I will comment on the ATM analogy, it is clever in that it throws many Australians off the scent of what is really going on. Gina and other miners have demonstrably been extracting super profits (i.e. profits above a fair rate of return) from mineral resources which belong to the Australian people. Other countries (e.g. Norway) with great mineral resources have good systems for ensuring that revenues and super profits from finite resources, which are owned by their peoples, are properly captured and managed in sovereign funds (at arm's length from governments' notoriously sticky fingers) for future generations. In Australia, attempts to set up similar systems for our mineral resources have been systematically blocked by Gina and her mining mates. If we want to use an ATM analogy, it's as if Gina and other miners are using Australia's pin number and are blocking attempts for us to change the pin. Of course miners will argue that the cash is better off in their hands because it will eventually flow through to all Australians. You can choose to believe that if you wish but personally I think those super-profits belong to future Australian generations and should be managed accordingly, by capturing that revenue, putting it into a Sovereign Endowment Fund and ensuring only the income, not the capital, is spent and then only on health and education to ensure our great Australian way of life for future generations. Instead, the government finds itself short on cash, makes deep cuts in soft targets like health and education, contemplates increases to GST, raids super etc. All of which have huge negative long-term consequences but are easier or at least "less difficult" to implement than reappropriating super profits from powerful miners. Make no mistake, this problem does not go away with Gillard, miners have made sure their position is protected regardless of who is in power. It's a pity Australians are too dispersed to have the same type of powerful representation in government.
You are right Alex . Sadly, it seems the Australian electorate is about to go through yet another era of conservative Government where infrastructure is allowed to run down, beneficial social change is stalled and our resources wealth is squandered on tax cuts designed only to win elections.
Ms Rinehart has hit the nail right and hard on the head. Painful. RGJ
Finally! Gina's picked up a tool and exerted herself. Must have got tired of counting Daddy's royalties. Left it pretty late - what is she....60.
Gee David how ever do you carry that huge chip around? Do you manage by yourself or do you have help?
Your on the right track Graeme,but I think David is well balanced with a telegraph pole on both shoulders.....the treated ones that are green matching his skin colur
Whether or not the prediction of Gina Rinehart is accurate, is a matter for us all to see. If it is exaggerated, its because of her strong allegiance to the resource sector. Whatever the case, how dare this Lame Duck PM state that it is "Absolute Nonsense". Gillard and Swan are the LAST to define any prediction as "Absolute Nonsense". Actually is the Physical World of proven absolutes such as Absolute Zero being -273 deg C; the only other "Absolute" I have ever encountered is the "Absolute Failure" of the Gillard Government Economy and the "Absolute Nonsense" of the predicted surplus that became a $27 BILLION Deficit. Don't talk to me about "Absolute Nonsense" Prime Minister because I am living through the "Absolute Nonsense" of your failed policies, ministers, programs and almost the highest per capita debt to the World Bank in the Western World. Now that is a true definition of "Absolute Nonsense".
Another display ignorance and stupidity by a bad Government. When will Gillard and Swann come to their senses, it certainly will not be before the next election
Well Christine Milne - there is taxation and there is goverrnment theift by taxartion and levies. Unfortunatly Ms Milne you and your socialist friends obviously do not understand the difference
Obviously it is time the government considered nationalisation of our resources
David your language says it all.....nothing !!!!
The whole concept of a super profits tax is ridiculous. A properly structured taxation system will automatically capture the higher tax revenue from any company that is doing particularly well at any given time. You cannot legislate against individual industries because A) By the time you pass the legislation, there is no guarantee that they will still be making high profits. And B) If you want to hit them in the good times, then you should also pass legislation to look after them in the hard times, so they don't have to close mines and put people out of work when commodity prices fall and mines are no longer profitable. In the end the best answer is to just let the tax system do it's job and that applies to Banks, Miners and every other industry. As Tony Abbott so rightly said "first do no harm", but this government strikes out first, then runs around playing damage limitation games.
What Gina had in mind is a lesson for Gillard's pile of debt VIZ: Interest is often compounded, which means that interest is earned on prior interest in addition to the principal. The total amount of debt grows exponentially
What Gina had in mind is a lesson for Gillard's pile of debt VIZ: Interest is often compounded, which means that interest is earned on prior interest in addition to the principal. The total amount of debt grows exponentially