The mining magnate does away with the constraints of arithmetic, simultaneously demanding lower taxes more public spending and lower deficits
A striking feature of the age of billionaires in which we now live is that billionaires are more and more inclined to give us the benefit of their opinions. In the past year alone, we’ve had Marc Andreessen’s retro-futurist “Techno-optimist manifesto”, Mark Zuckerberg’s pronouncements on the future of media, and, most recently, a cosy chat between Elon Musk and Donald Trump (whose billionaire status is often touted but remains questionable). In most cases, the main effect has been to demonstrate that, however good they are at making money, billionaires are no smarter than the rest of us when it comes to politics or the ordinary business of life.
Australia’s richest billionaire by far is Gina Rinehart, who has massively multiplied the already substantial fortune she inherited from her father, the late Lang Hancock (Rinehart claims she inherited more debts than assets). Like Hancock, who spent decades on the rightwing fringe of Australian politics, Rinehart has never been shy about expressing her opinions.
A look at those opinions suggests that, taken as a whole, they would pass the “pub test”, in that they are about as sophisticated and intellectually consistent as you might expect to hear in the evening at a public bar. In common with many opinionators, Rinehart disdains the constraints of arithmetic, simultaneously demanding lower taxes, more public spending and lower deficits, all to be paid for by eliminating unspecified waste, fraud and duplication.
A recent piece in the Daily Telegraph, published as part of a News Corp “Bush summit” series, illustrates this point. Hancock begins with a familiar litany of woes about the high costs faced by farmers and the burden of (unspecified) red tape, forcing them off the land. This part of her article could have been (and has been) written any time in the past 50 years or more.
No one reading this sad tale would be aware that farm incomes have been at record highs last year, an outcome reflected in strongly increased land prices. The executive director of the Australian Bureau of Agricultural and Resource Economics and Sciences, noted at the time: “When you look at the cropping sector in particular, average farm incomes are about 75% above the 10-year average – about $665,000 – up slightly from last year.”
Farming is a risky business and these outcomes depended in part on a string of good seasons that came to an end this year, with farm incomes now back to where they were three years ago. But a rebound seems likely, making Rinehart’s gloomy pronouncements seem overstated, to say the least.
Turning to remedies, Rinehart wants a string of tax reductions, including the abolition of payroll tax and stamp duties along with reductions in excise tax on fuel. A striking feature of this wishlist is that most of the benefits would go to city dwellers. Few farm businesses are large enough to reach the threshold for payroll tax. Family-owned farm businesses are exempt from stamp duty on intra-family transfers, while city dwellers routinely pay tens of thousands of dollars as a cost of moving house. Finally, no excise tax is paid for on-farm (or mining) use of fuel.
These proposals aren’t matched by a willingness to accept reduced public services. After acknowledging the need for “nurses, police, hospitals, health care, our increasing numbers of elderly, emergency services and veterans (And much more)”, Rinehart goes on to demand a massive increase in provision of these services to rural areas, saying that “the Pilbara in Western Australia should have some of the best hospitals and infrastructure in the world, plus some of the best playgrounds and sports facilities”.
Some areas of public expenditure didn’t make it on to her list, but Rinehart has covered many of them elsewhere. She has been a keen proponent of publicly subsidised dams, relaxing means tests on pensions and more spending on defence (apparently to be financed by selling off the defence department’s “pot plants, paintings and sculptures”).
The closest Rinehart comes to suggesting a cut in public expenditure is a nebulous reference to handouts of “another $500m here, another $500m there”, most of which is apparently spent within the Canberra bureaucracy. Doing away with these would supposedly cover the tens of billions of dollars of reduced revenue and higher spending implied by her lengthy wish list.
And, of course, all of this is to be achieved while cutting debt and deficits, lest we share the fate of Sri Lanka and Argentina.
There’s nothing particularly unusual about Rinehart’s grab-bag of opinions. You can hear similar thoughts in any public bar (or, with minor variations, any inner-city coffee shop). But as a contribution to discussion of public policy, they are best left there.
John Quiggin 
It is a very good argument for abolishing billionaires and the future possibility of anyone becoming a billionaire. The core policy recommendation demanding “lower taxes more public spending and lower deficits” is in itself as old as “Blue Hills”. No, much older.
Billionaires share with many other claimed experts the characteristic of being “no smarter than the rest of us when it comes to politics or the ordinary business of life”. These claimed experts are also often no better than the rest of us at making predictions involving politics and economics. There are groups of experts who are better (often immensely better) than non-experts in certain disciplinary areas.
The disciplinary areas which generate genuine experts must exhibit the following characteristics:
A valid environment contains regularities which make at least some features of it “operably” predictable.
The valid environment must support many repeated attempt with feedback.
The feedback must support large volumes of timely feedback.
A key requirement of becoming an expert is onerous, structured deliberate practice in and of the discipline. Natural aptitude, lucky breaks and consistent support, personal and professional are also needed.
“An expert is a man (or woman) who has made all the mistakes which can be made, in a narrow field.” – Niels Bohr.
Bohr is being a little harsh for comic effect. A genuine and ethical expert gets right what he or she can and is valuable to society in his or her metier.
Billionaires are rarely expert in anything except being lucky by birth and lucky breaks alone. Their most demonstrated characteristics under neoliberalism or any form of unfettered capitalism are greed, selfishness, callousness and self-aggrandizement. The best course against them is to abolish / make impossible their excess wealth by re-working our political economy appropriately.
Oops, I should have credited Veritasium (on Youtube) for the points about experts. Put slightly in my own wording, that’s all.
Frommmmmm the cheap seats:
I have no idea at all what should be done about taxes in Australia. I just have to say though that lately, using averages when we have such insane inequality doesn’t really do it for me anymore. What’s happening with the farmers in the lowest 2 quintiles? (Don’t worry, I’ll go google it … )
Also I am biased, since I like food so much.
N, I not only like food, I find I can’t live without it.
I’d probably feel a bit better about all the foodflation (hey! i made up a word) (ok no it’s not that impressive … 😉) if I thought more of it were going to actual growers and workers. Which, maybe it is. I don’t have any idea. A good bit of it may have gone to oil companies.
As much as we need to de-carb in order to save ourselves, I find I have less ire towards oil companies than many of the people I might’ve expected to be in step with, around here. Everyone’s going after them. Whereas it seems to me that the Industrial Revolution, and capital formation, etc etc, is what made it possible for us to have solar panels. (Not that I have any yet.)
And we all participated in it and benefited from it. And as humans, what were the chances that we weren’t going to go through that process? Very low, I think. And yes, it’s bad to lie. Of course.
Still to me it seems wiser to focus our energy on the transition. And yes, clawing back some of the profits can be part of that. But I can’t get with the whole anger thing. We all did it. And oil was the only game in town, then. Nobody held a gun to my head, to make me drive a car. Or eat food that came on a truck. Let’s put the energy of our regrets into making better choices.
Billionaires are quick to criticise but slow to apologise. The environmental damage done by their business enterprises always gets little acknowledgement and even less scrunity.
I am impressed with the Greens idea of a super profit tax. The details may need a lot more work to ensure equity and fairness tests are fully understood. I would like the tax to be called a Price GougingTax (PGT) just to make it transparent that it’s the greed that is being taxed. Just like there is high taxes on smoking and alcohol consumption, a tax on greed would be beneficial. If we are trying to use taxes to moderate social evils then a tax on greed would be welcome. By the way I had to laugh at a CEO who defended his companies high profits by suggesting that price gouging had to be carefully defined before it could be criticised.
In recent times one billionaire who was spruiking the benefits of AI. This same billionaire made public statements in the past warning about the dangers of unfetted AI usage. It seems that as revenue from AI technology escalates, the morality and ethics of its usage is overlooked.
As for mining billionaires, they are all engaged in environmentally damaging business activities. They can become like a modern day Nero. Sprouting the beauties of the arts facilities they support and the benefits of the music they encourage, while at the same time doing next to nothing about global warming and climate change.
Inherited wealth rarely comes with any increase in wisdom.
The broadest and most sensible name and application is an excess profits tax (EPT). Such taxes have often been levied during major wartime events. Soon we will be facing a set of existential crises which will make the wars of the 20th C and the 1918 influenza epidemic look like relatively minor events. Without an EPT and many other stringent measures we will face national and global civilizational collapse.
one thing that mmtb*
has, is the power to eliminate the sale of the Financial Review newspaper in Western Australia.
any government tried that and you wouldn’t be able to function due to the overwhelming stuck pig squeal.
mmtb?
more money than brains.