Cut her some slack - Gina Rinehart

Gina Rinehart is probably one of the most despised public figures.

Contrary to popular belief, her wealth was not an accident of inheritance. Few people realise Rinehart inherited a much indebted company after her father's death 20 years ago. Unlike many wealthy heirs, Rinehart has not just maintained her fortune but multiplied it many times over. When she made her debut on the rich list after her mining magnate father Lang Hancock died in 1992, her net wealth was estimated at $75 million. Now she is worth 386 times as much. At nearly 58, she remains the ceaseless entrepreneur.

Rinehart’s success is indicative of the changing role of women in our society and the positions of authority they now occupy, something that simply wasn’t possible let alone conceivable 40 years ago. It’s a cause for celebration that finally our society is in a position where the person who has the most drive, the brightest ideas and the tenacity to see something to the finish is the person who will succeed, regardless of gender.

Yet despite her enormous success, she is constantly mischaracterised as self interested, arrogant, selfish, greedy and cold hearted. Similar unfair criticisms have been made about other successful women like Hilary Clinton and Julia Gillard, who are constantly denigrated for their appearance. But these women (including Rinehart) are simply too modest and humble to hijack the feminist movements to attract sympathisers.

Rinehart’s increasingly frequent forays into public policy should surprise no one. The media preposterously paint Rinehart as being in agreement with the Liberal Party, when the truth is that she is on one side, and both the Labor and Liberal Parties are on the other. And it’s no wonder that she refuses to engage with the media when they are unrelentingly left-wing in policy terms.


But despite her unpopular opinions, a lot of her comments are irrefutable.

“If you want to help the poor and our next generation, make investment, re-investment and businesses welcome. High-tax socialist policies don’t create jobs, business and investment do”, Rinehart said recently, pointing out Australia is mired in costly labour regulation, investment-sapping taxes and carping jealousy fanned by a pusillanimous political class. Her basic message was that the costs of business are running out of control and that the Government is not listening to the business people who know first-hand what it takes to employ a worker.

Her remarks drew vituperative rebuke from the Prime Minister down.

A seemingly self-serving economics lecture by one of the world’s richest women, whose fortune owes as much to progeny as to acumen, might not be a marketing triumph but it doesn’t blunt the truth of her message.

And the truth, backed up by a mountain of economic theory and evidence, hurts. Australia has become excessively expensive, with price increases concentrated in parts of the economy the government meddles most with (ie. health, education, and child care).

The Commonwealth parliament alone passed a farcical 7,100 pages of legislation last year, compared to 358 in 1958. The tax system requires 21,000 bureaucrats to enforce, and the federal departments of health and education, for example, employ almost 10,000 people without running a single hospital or school.

Far from being loopy, Rinehart’s remarks reflect standard, even boring, economic theory, entwined with a classically liberal philosophy that unwieldy government undermines national and individual prosperity.

Rinehart’s observation that Australian wages are high compared to Africa’s prompted fury, but logic points out higher minimum wages and laws hampering businesses hiring and firing decisions bolster unemployment.

The prime minister’s response that paying people $2 an hour “is not the Australian way’’ not only grossly misrepresents Rinehart, but is pompous, suggesting Africans pay each other miserly sums by choice, and ignorant, implying the costs of goods and services in Africa are similar to here.

Rinehart mentioned labour rates in Africa - she did not advocate $2 wages in Australia. Her comment on statistics was immediately manipulated by the Treasurer and most of what she had to say was soon lost.

When criticised about wishing to employ foreigners, this is also untrue. The government is right to assist mining companies — even those run by Gina Rinehart — to obtain foreign workers for constructing large projects. Australians are unwilling to work in remote locations – and they particularly don’t like to ¬settle thousands of kilometres from their family and friends to do hot, hard and dirty work for the resources sector. So we’re left with training programs and importing workers to fill the skills gaps that the rapid expansion of the industry have opened up, or major projects get delayed or cancelled. Preventing employers bringing in workers will simply delay projects and drive up the price of labour (which of course unions are happy to see). In 2011 there were more than 70,000 people in Australia on temporary employment visas. The maximum of 1,700 that would be employed at the Roy Hill iron ore project are a tiny addition to that.

Companies in WA are investing in low-cost highly resourced Africa as businesses need to sell their product on the world market and not at Australian prices.

Fortescue put off a thousand people recently and Xstrata has just announced another 600 job losses. Rinehart said Australia was becoming too uncompetitive. This is a statement of the accepted truth. It has been said by numerous business people for the past two years e.g. Jack Nasser, chair of BHP, and his CEO Marius Kloppers when announcing the deferral of the Olympic Dam.

Rinehart’s claim that Australian taxes are driving international investors away reflects the Government’s own Henry tax review, which argued global investment decisions are highly sensitive to differing international tax rates. Australia is slipping down the ranks of global competitiveness due to the carbon tax, red tape, new and increasing taxes and infrastructure that lags well behind the world’s best.

Even Rinehart’s admonition of excessive smoking and drinking channels Max Weber, the German political theorist who argued the relative success of the Anglo-Saxon countries rested on their relative monopoly on industry, thrift and abstemious living. “Our mines still produce great wealth, but it no longer will be enough to subsidise class warfare, complacency, overspending and an increasingly expensive bureaucracy’’ Rinehart says. When Australia’s boom becomes a whimper, her ideas will start to resonate more widely.

While the media continues to mischaracterise her, little is known about her charity work and her passion for helping young girls.

Rinehart could sell her mines and swan around the Riviera for the rest of her life. Australia is lucky to have a billionaire with an interest in public policy, with the resources to provide a potential counterweight to the tired chorus of vested interests in Canberra.