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The Forum > Article Comments > Sending profits abroad is a good thing > Comments

Sending profits abroad is a good thing : Comments

By Oliver Hartwich, published 4/7/2011

Money Australian industry sends overseas can't stay there, and eventually benefits the Australian economy.

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The arguments by Oliver Hartwich in support of foreign investors continuing to take not only profits, but the finite resources that generate those profits, off shore is spectacular in its tunnel vision. He claims no one would argue that foreign companies reinvesting in Australia create jobs and economic activity. So do natural disasters. Not all economic activity is the same.

But he is not alone with this snake oil salesman's view of the world. And we can expect to continue to hear this kind of crazed, cacophonous noise - and really that is all it is - until the Resources Rent Tax and a carbon price are well and truly established.

There's no end of potential investors in Australia, including foreign governments looking at the longer term value of owning a piece of the Australian pie. What a pity that Australians who call themselves business men cannot think past the quick buck. Same for opportunist politicians in both major parties.

I think we're all tired of hearing the bleating of mining magnates and the likes of Harvey Norman and Ita Buttrose . . . these bloated people who want to pull up the drawbridge now that they're sitting pretty to protect their privilege no matter how high the cost to current and future generations of ordinary Australians. They just don't get it and no matter how hard they try to sell the economic myth, the utter superstition, that private wealth equates to the public good, the battle they're fighting is a losing one and we have news for them.

We were all in the room when the citadels of the marketeers came crashing down around all our ears. It's time for ideologues to step out of the way. We want a future that is cleaner and sustainable, one where we can recognise the difference between sensible enterprise and sheer greed.

Russell Pollard
Posted by russellpollard.com, Monday, 4 July 2011 5:25:16 PM
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*It’s the luck of history as to where Australia’s mineral wealth ends up*

Nor really David. For in the end, people make their own luck.
Australians are the world's biggest gamblers. So throwing it down
the pokies is clearly more fun, then investing in their own country.

If people spent that 20 billion a year spent on gambling, instead
buying BHP shares, luck would have it that more profits would
land up in Australia.
Posted by Yabby, Monday, 4 July 2011 7:49:19 PM
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If anyone has any of those worthless paper US dollars or Pounds (well they are no good here according to him) I don’t mind if they send them to me…..
I have found a use for them.
Thank you in advance for allowing me to take them off your hands.
Posted by sarnian, Tuesday, 5 July 2011 10:20:15 AM
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Maybe commenters on the issue of foreign mine ownership should do a little more research. Obvious questions would be:
1. How much are combined mining royalties, corporate taxes and input payments (wages, services) to Australians. How do they break down per mining company, how per region. How much of the exported value stays in Australia (ie is transferred to Australians)
2. Investment: how large are the accumulated investments (say over the past 20 years) of the foreign miners (count for convenience's sake Rio as foreign and BHP as local, though both companies' centre of power is in the UK). What are the components (cash, immovables, leasehold improvements?
3. How easy/costly would it be for a foreign miner to repatriate accumulated profits in response to, eg, lack of reinvestment opportunities, overall leveraging (after a private equity takeover) or hostile gvt policy
4. What could an Australian gvt do to maximize medium term (say 10 years) utility from the resources that it owns, including actions often considered "sovereign risk" like increasing royalty payments, apply existing rules much more strictly, act opportunistically where possible
5. Why does Australia give away the condensates associated with offshore gar (to be processed into LNG) which may represent more value than the gas itself?
6. Why does Australia not hire an operating company to exploit onshore natural gas reserves itself in order to keep relatively clean and abundant energy cheap, rather than paying clearly inefficient bribes to all kinds of pressure groups within a policy formally directed at reducing COP2 emissions..
7 And so on. Pse notice that "employment" would not be part of my questions: that is only relevant to actors interested in maximizing votes.

Anyone who can answer all of these questions satisfactorily has a right to speak publicly on ths issue.

I doubt anyone knows all of the answers and even more that that someone will be allowed to share her knowledge. Which may be a good thing..
Posted by Rien Huizer, Tuesday, 5 July 2011 4:14:29 PM
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Rien Huizer:
In regard to the gas that is being sold to overseas interests, Australia is going to be sorry that this is happening. As the amount of Australian oil diminishes and it is down to about 30% of out present needs now, we should be converting out truck fleets to running on gas.
OK we have a large reserve at the moment but the more we sell overseas now, the less for us later.
The gas (and oil) industry should be nationalized so as to control its use.
It is not a case of profits going overseas so much as the end use of the gas, being available for us.
Posted by sarnian, Wednesday, 6 July 2011 9:34:25 AM
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