I cannot resist reposting the following. I came across it while idly browsing Google Blogs on mining. I do not know any of the players involved or even the background. But it all sounds so heated and it presents so bizarre a picture of the Austrian mining scene, that I repeat it for your edificantion and enjoyment–here is the link to the complete piece.
Read the whole thing if you can stomach it – I’ll just extract a section:
“Martin Ferguson’s legacy is a budget short of revenue amid a mining boom. That’s quite an achievement. But it’s not just lack of tax revenue flowing from the mining boom that is of macro-economic concern, it’s the way the mining industry’s hell-for-leather expansion is not just strangling manufacturing and tourism but driving up the cost of mining itself.
There is no doubt that if a monopolist owned Australia’s resources they would manage them quite differently than they have been managed in recent times. A monopolist wouldn’t drive up the cost of building and running mines by trying to build hundreds at once. And a monopolist wouldn’t drive down the price of their own resources by building hundreds at once.
Of course, Australian mines are not owned by a monopolist, but they are supposed to be managed in the national interest by the federal minister for resources. Unfortunately for Australian taxpayers, that minister has, to date, systematically conflated the interests of foreign miners with those of citizens.”
I managed to knock out a quick reply yesterday and the AFR have run it today. A short précis appears in the print version of the paper with a link to the full version online.
I first make the point that the mining industry pays a lot of tax and then:
So the notion that Ferguson’s legacy is a budget shortfall during a mining boom is somewhat misleading. True, he was a cabinet minister at a time when the government proved incapable of balancing its budget but the blame must be shared around.
The expansion of the mining industry and the resources that are being attracted to the industry are a capitalist economy at work. We are seeing exactly what should happen under specialisation and the division of labour. Those industries where Australia has less of a comparative advantage are shedding resources to the mining industry. This works through increased prices and wages. It is remarkable that Denniss is able to portray this process as being some sort of anomaly or mistake.
The most frightening aspect of Denniss’ anti-mining screed is his view that a ‘monopolist’ would manage the Australian mining sector differently to how it is currently managed, as if that were a good thing. Denniss suggests that the resources minister should act as that monopolist would. Here Denniss is criticising Ferguson for not being a communist!
As I say the Denniss piece was simply astonishing.