Minerals Week Speech

I’d like to acknowledge the elders past and present. So much of Australia’s mining works in conjunction with our aboriginal brothers and sisters. I'd also like to acknowledge Brendan Pearson, who is doing a superb job. And there are so many executives in the media. I'd like to acknowledge the media, who are doing a splendid job.

 

(LAUGHTER)

 

It's all good fun isn't it.

Ladies and gentlemen, let's imagine we have a table right here. Ten people on the table. And one of them, through providence of their own, devises a way to earn $10. And the other nine people at the table, there's ten people at the table, the other nine people work out transactions to pass that money around. Then you have 10 people by $10, they say the GDP of that table is $100. And 90% of it is those other nine people. And they say democracy supports those other nine people and they win the democratic argument as well. But the reality is, of course, we have got to ask the question, who came up with that $10 in the first place. Where did that money come from?

Well I can tell you who they are. They're the coal miners. They're the iron ore miners. Those ‘evil’ people in the live cattle trade. Those ‘evil’ people in the live sheep trade. The grain producers. The beef producers out there devastating the environment as some would lead you to believe. They're the people who created the primary inception of wealth in this nation.

That is where it comes from. That's how it works. That's how it has always worked. And sometimes we confuse the actual fundamental economics of this nation, because we start believing that the 90 percent of the GDP was actually the primary generator of it. No. It was the accelerator of it and the mover of it. But the overwhelming wealth of this nation historically and to this day comes from those people who are the primary generators of it. Away from that is a form of fatuous economics.

Now we are still fighting. Still fighting to this day. And they fight it in the most ardent forms, right in your face. In fact many of the groups that fight you have tax deductibility. They're charities, apparently. A charity whose job it is to completely destroy the economic base of Australia. And they fight it also in other ways. With green tape. With red tape. And now I've seen, I was up talking to Aboriginal groups the other day and they gave me another term. Black tape. Because apparently, they got their own land back, but they can't do anything with it. And these become piece by piece, a mechanism which works against the interests of our nation. Right now, our nation is having a bit of a reality check and I'm glad it's doing it. It's something I've been talking about for ages, but now the penny is starting to finally drop. Around about January, ladies and gentlemen, families are going to come back from holidays, mum and dad are going to go back to work. Mum's going to turn on the air conditioner, get the kids ready for school. School's going to turn on their power.

And if we don't watch out, the lights are going to go out, in places like Sydney and Melbourne. This will be a salutary lesson in how economics really works. This will be a salutary lesson against the fatuous economics that's being peddled. Because we have the discussions as we speak, and we have the Member for Hunter, in the Hunter Valley, honestly talking that he wants to see Liddell Power Station closed down. How is this going to work? I know little about mining. Not as much as you do. But by God I know a little bit about politics, having been around the game for a couple of decades. I'll tell you what happens when you get caught in a lift, somewhere between floor 24 and 25 and they're there for a few hours. At one stage or another, if you're there for long enough, someone wants to go to the bathroom. It becomes an absolutely seminal point of where their attitude towards how power is generated changes.

It becomes a seminal point about their views on the coal industry, and therefore the mining industry, because you need metallurgical coal and you need thermal coal to produce steel. We have to reinforce the basic message about how this works. I mean look at this place. Above us, steel pelmets and trusses. It's not made out of wood. It's made out of steel. You're going to need iron ore. You're going to need metallurgical coal. You're going to need thermal coal. You're going to have to have a reliable baseload power supply if you're going to do this. Around us, glass. Same deal. Aluminium, same deal. It's solidified electricity.

We have so many things that we have to sell that message, to break down the concept and this fatuous economics that is working against your interests, it's working against your interest now. If we take another example. Let's pick someone out here. You. That's a very nice suit you've got on. Where did it come from?

 

(Audience member: “from Australia.”)

 

I bet it didn’t!

 

(LAUGHTER)

That suit came from - he's a well-dressed man, I reckon it's Italian. That's where he got his tie from as well, I can assure you of that. And the shirt, not that far behind it. I don't know where his shoes came from, but if he says RM Williams, well that's owned by Louis Vuitton, it's French.

What car have you got? Don't lie.

 

(Audience member: “a Jeep.”)

That's not an Australian company. It's American. And the fuel in it, came from Saudi Arabia via Singapore. And the phone in his pocket has come from overseas. And the stove you cooked on last night, probably a Bosch from Germany. And the fridge, and the television, and just about everything in his life. Everything in his life came in on a boat from somewhere else.

Somebody, somewhere must be sending something in the other direction. I'm a little old bush accountant. That's economics 101. Otherwise they're sending it to you for charity. And that doesn't work. Not for long. So who are the people putting things on a boat that send it in the other direction? It's those ‘terrible’ miners. The iron ore miners, the coal miners, ‘terrible’ cotton farmers, ‘evil’ cotton farmers. ‘Terrible’ people in the live cattle trade, ‘terrible’ people with all those animals not looking after them properly. All those people are the reason that people have that standard of living. And I can see the former Resources Minister up there behind. He's got a big smile on his face. He's liking this.

So, this is another part of this fatuous economics that we've got to work against.

 

And the recent events has made me give a bit more clarity to what I need to express to the Australian people, and this is one of the key things. This is one of the key things that we've got to deal with.

 

If you want to test how mining works in Australia, then just have a look around. The first coal was exported from this nation in 1799. It was discovered on the ground around Newcastle, an escaped convict. I'll be one of them in a little while.

 

(LAUGHTER)

 

In 1799 they discovered coal and exported it to India. We're still trying to do that right now, exporting to India. If you look at Newcastle, coal. Give me a town. Mt Isa, copper. Melbourne, gold. They probably don't think about it, gold, but around in the 1860's, 40 percent of the world's gold supply came from Victoria, Ballarat gold. Now if you look at all Inverell in my electorate, tin. Rockhampton, gold, and in fact everything. If you take Darwin now, gas. Nhulunbuy, bauxite. And where my family started, in 1857, Avalon, gold. Guess what they were? Gold miners. But they were smart, they worked out where you make the money is owning the pub. So this is the history of our nation. This is how it works. It's not going to change. It's not going to change. We sometimes fool ourselves that we're going to become Germany or California. We're not, you're Australians and you're going to stay predominantly Australian. That is your economic base. And by the way, you've been doing very well out of it.

 

26 years of uninterrupted growth. Take the reality pill. Chew on that reality pill, because that's the only way you survive. If you go down this path of fatuous economics, ideas of closing Lidell, somehow moving away from coal fired power tomorrow, living in this renewable world, continuing to pillory the actual essence of your wealth, you will do something that is quite unremarkable. You will become poor. And that is not a good political prospect.

 

In the short term, we can tell where this market goes. You gotta read things. The Baltic Dry Index gives you a rough indicator gives you a rough idea of how things are going in the short term. Gives you a rough idea of where the global markets are off too. And you can also look into the long term. And if we just look at some of the things of where we are. In steel production per person, which is something that always interests, with China at 493 kilograms per year it's basically exactly the same as Japan, 493 kilograms per year. The world is on average 208. The United Kingdom, 164, developed economy, little old Australia, 245. But there is always opportunity. You we can see the opportunities, it's how we tap into it. India is at 63 kilograms. 63 kilograms, at 1.1, 1.2 billion people. Even if they do half the job that China did, there is a market there. Now the Indian people are very good at solving Indian problems, and Indian families even more so. But there is an opportunity for us there and we have always got to be looking for the opportunities. I don't think they're going to be running around here wanting to buy mobile phones off us. Or thinking they're going to buy suits off us. Or believing that we have better ties, or wanting to buy cookware off us. But by gosh, they're going to want to buy some of those raw materials which are the fundamental underpinners of economic growth.

 

Steel, aluminium, they want to buy coal, iron ore, bauxite. They'll probably won't want to buy thermal coal but they will want to buy metallurgical coal. And we can fool ourselves and say oh well, what we're going to sell them is the Labor Party's Renewable Energy Target. But I don't think they're going to buy it. I really don't. I think they're going to look after the 300 million or so people they still have without the lights on, and look after them. And when the power comes on, they're going to want us to supply all the accoutrements of life that go hand in glove with that. Which all require metals, minerals, delivered by us in that area.

 

So we have to do our bit to try and make sure that we're part of this. Now we are doing this. The Junior Mineral Exploration Tax Credit, it's something we got through just the other day. And this is going to encourage more people to get into the mining game. It's going to be vitally important for us.

When you look at it Australia has always had it. We need more Gina Rineharts, we need more Andrew Forrests, we need more people who have the capacity to start from the bottom and make their way through. But we definitely need the BHPs and we definitely need the Rios, but we need the prospect of other people coming through and that is also part of the history of Australia.

 

No better encapsulated than by towns such as Mount Morgan. Poor old William McKinley, what a ringer, goes out, is also a prospector, goes up into this auriferous body and thinks “hang on I’ve discovered gold, everybody else tells me it’s iron parities, but they were wrong”. Andy Gordon comes along and basically swindles him out of it. See Andy Gordan made a big mistake in trying to keep it a secret and told his daughter, then they get swindled out of it by the Morgan Brothers. The Morgan Brothers made the biggest mistake of their life and went into business with the solicitor. William Knox D’Arcy comes into the game. But all of this immense wealth generated by Mount Morgan. And if you want to know where that wealth ended up, William Knox D’Arcy, after he made an absolute bundle, absolute bundle, set up a little company, called the Anglo Persian Oil Company. Now, you might have heard of it, it’s called British Petroleum, BP. The wealth from that emanated from Mount Morgan near Rockhampton. It would have been good if it was called Barnaby Petroleum, but that is the essence of the incredible wealth, the exceptional wealth, not only for Australia but globally, that can be produced by your industry. We have to sell that message, because no one else out there will.

 

Once I go into that chamber today they are going to start talking about Renewable Energy Targets and the whole thing starts collapsing around your ears. The Labor Party will be banging on about me predominantly and fifty per cent Renewable Energy Targets and closing down Liddell, and that’s where you think “what on earth is happening in this building, what on earth is going on, where does this end”. Well I know where it ends, it ends in disaster.

 

So we have to have other policies as well that stand beside it. So we’ve got the Junior Mineral Exploration Tax Credit, try and drive that through. And also try and get the substantial infrastructure. The beef roads in the north that no doubt will be the mineral roads. We put $100 million on the table out of the blue for the Winton Laverton Road and I think the beef roads they put another $26 million on it. “What’s so good about that”, well what’s at Laverton, gold prospects and what do they need? Roads. What are we trying to build? Roads. But we have to sell that to a constituency that really can’t see the reason for the investment in the infrastructure out there, but it’s the infrastructure you need. Inland rail, should have been built years ago. Corridor of commerce from Melbourne up to Brisbane through the inland and what’s it going to go past? Mineral precincts, so we can build the bulk commodity movement of product and get that better intermodal efficiencies. This is something that, during my time in politics, is one of the proudest things to be involved with. Just getting the money on the table to get that thing going and get this product moving. At the same time putting the feasibility study money on the table to go from Toowoomba to Gladstone so we can get the bulk delivery of those products to a bulk commodity port.

 

This is the sort of vision that we need if we are to accept the reality of the economy that we live in and start getting this show on the road so we can pay back the $600 billion we’ve managed to accumulate in debt, set up by the Labor Party with their crazy spree under Rudd-Gillard-Rudd. Where they hooked us up to every late night contract on late night TV that they could possibly find and left us will the bill to try and pay.

 

We’re redesigning the NAIF, the Northern Australia Infrastructure Fund, so it can be better used to get access and start delivering some of these infrastructure projects essential to the delivery of mining outcomes. And we will just have to take people head on. Those people collecting the tax deductibility to fight us, take them head on, and start selling back to the Australian people the economic message “this is how you are actually going to survive, this is how you are going to win as a nation”. If you like hospitals that are payed for out of the public purse, if you like schools that are paid for out of the public purse, if you like to be defended as a nation paid for out of the public purse, if you like the roads and the freeways and the tunnels paid for out of the public purse, if you like to go to the Opera House and see all of the cultural events, a lot of them subsidised by the public purse then you’ve got to have an economy that creates a public purse. You’ve got to have somebody somewhere making a buck. Simple as that. Who is our biggest individual tax payer in Australia? Gina Rinehart. Oh that ‘terrible, terrible’ woman, Gina Rinehart, oh shocking. All that tax she’s paying, someone should stop her. They could, all she has to do is move to Singapore, and it stops then. And then Singapore gets the money. And what about the tax that BHP, that Rio’s paid? These ‘terrible’ people paying all this tax, supporting all the infrastructure in our nation. Sometimes they try and inspire a guilt complex for something but overwhelmingly the sustenance of our nation is determined by our primary exports, by our mineral exports. We’ve got to push back, we’ve got to sell that message.

Galilee Basin, we’re in the fight of our lives trying to open up a mechanism to provide wealth for this nation, this is total insanity. What is the next precinct? And when you say to these people, “ok if you don’t want that wealth what is your alternative? What do you wish to put on the table? Where does this fantasia come from? Where is the wealth? If you don’t like coal, you don’t like iron ore or you don’t like the live cattle trade or you think that the sheep industry is ‘evil’. And I’ve seen this before because at the start we were involved with it a little bit with the timber industry. I watched them close it down, I watched them close it down. So don’t think they can’t, they can. And they’ll pick you off one by one. The biggest mistake you make is you think you’re the fastest runner in the crocodile pen, you’re not, the crocodile will get you, and it’s just which one?

 

You’ve got to work with everybody else, understanding that if it’s a live cattle battle, it’s your battle. If it’s a coal battle, it’s your battle. If it’s an iron ore battle, it’s your battle. If it’s a grain battle, it’s your battle. You’re all in the same game. They are very coordinated, they’ve got a lot of spare time, a lot of spare time to work out how they deal with you and we’ve got to make sure that we get that push back.

 

So, if they don’t want the Galilee Basin open then what’s their alternative, where does this wealth come from? Where is this fantasia economics, where is this money going to come from to support our nation? They always tell you about the prospect of something in 10, 15 or 20 years’ time, but it just doesn’t turn up. They will show you the models that say look we closed down Hazelwood, but don’t worry this will transfer to this and this latent power will come across from here and everything will be fine. You think, “That doesn’t make sense, close down 24 per cent of the power grid in Victoria, I imagine that would say supply is restricted and the price goes up, that’s how it usually works”. They say, “Oh no, you’re so old fashioned, you don’t get it”. And they close down Hazelwood and the power prices go up by 20 per cent.

 

So this is what we have to be part of. This industry has got to hold its head high. This industry has got to realise that you’ve got to be able to fight the fights. High efficiency low emissions coal fired power, we should be fighting that fight on behalf of everybody. Don’t just think, “That’s a coal industry fight”, no that’s your fight, that’s your fight. If they can win that argument that basically you don’t ever build another coal fired power station ever again then they’ve just created a huge win against you then you’re next. And of course the ridiculous thing is other countries will. They are building over 350 new coal fired power stations around the world, they will. And what’s one of our biggest exports, our biggest export at times? Coal. What are we making our argument against? That you should use coal. It’s absurd.

 

Right now the Member for Hunter, the Member Hunter went out advocated the closure of Liddell Power Station. This, I just don’t get it. Once upon a time the Labor Party supported labourers, that’s why they were called the Labor Party. Now they support Balmain and they are in a mad battle up and down the streets of Annandale, street by street wind chime by wind chime, kaftan by kaftan, fighting for every last one of those Green votes. They will win the battle against the Greens and you will be the casualties at the same time. What happened to once upon a belief they had in people who actually worked for a living, who actually went out in the sun and got themselves skin cancers? Who actually drove heavy equipment, moved things that were painted yellow? Where are those people? They’ve disappeared, but they reside in your industry and you should be having the discussion there. This is your industry, this is your jobs. It has been your jobs for about 200 years and it will continue to be your jobs. If you shut this industry down you don’t have a job because they are not going to replace it with another job, there is no other job. This is, all the time, the battles that we are going to be having.

 

So I wish you all the very best this week, you should wish me the same. It’s funny, you get to a time after nine years in the leadership group, thirteen years in politics, about two decades hanging around political parties, I get this game, I know how this game works, but you’ve got to fight for your game. You’ve got to fight for your game and if you just sit back quietly and think that somehow, miraculously in that green chamber or that red chamber people are going to have an epiphany and all of a sudden turn around and going to be on your side you’re fooling yourself. But if we get this thing going, if we get away from this factious economics, get back to the reality of the nation that we are, the reality of the nation that we’ve always been and what we’re going to be in the future and how we segway what we have into the prosperity of other countries into the future then our nation will become an incredibly wealthy place and we will be able to give to our sons and our granddaughters and our great-granddaughters the same standard of living that we expected for ourselves. All the best and god bless.

 

(ENDS)