Rinehart Says Australia Risks Europe-Like Crisis
“We need to focus on earning, not spending and we need to have a good environment for investment,” said Rinehart, who has a fortune of $18.6 billion through her ownership of iron ore assets in the country. Australia is moving “towards being another Greece, Spain or Portugal.”
The 58-year-old, who is seeking A$7 billion ($7.3 billion) in funding to build an iron ore project in Western Australia, in September said the country risked losing investment to West Africa’s nascent mining industry as it had become too expensive to remain competitive.
Rinehart has been a vocal critic of taxes on carbon emissions and coal and iron-ore profits, creating tensions with Prime Minister Julia Gillard’s government. Gillard has pledged to return the budget to surplus this year, and at about 10 percent of GDP, Australia’s debt compares with probable net debt in the euro area by the end of the year of about 73 percent of GDP, according to the International Monetary Fund.
While Australia’s economy has benefited from record commodity prices, companies including BHP Billiton Ltd. (BHP) have stated the peak of the China-driven boom is now behind the industry.
Australia’s mining industry was losing competitiveness because of rising burdens such as the minerals resource rent tax and increasing regulatory scrutiny, Rinehart said in Sydney yesterday, while releasing her book ‘Northern Australia and then some: Changes we need to make our country rich.’
“Net Commonwealth debt, already low by international comparison, will fall from about 10 percent of GDP in 2012 to zero by 2020/21,” according to the report. Net debt in the euro area will probably rise to 73.4 percent of GDP this year, the IMF said separately in its World Economic Outlook last month.
The billionaire in a September article for Australian Resources and Investment magazine criticized her countrymen’s attitude toward work, suggesting they should spend less time drinking, smoking and socializing.
Rinehart is in a legal dispute with three of her four children over control of a trust that holds almost a quarter of the voting shares of her Hancock Prospecting Pty. The closely- held company is also the biggest shareholder of Fairfax Media Ltd. (FXJ), Australia’s second-largest newspaper publisher. The company’s board in June denied Rinehart’s request for a board seat.
Her father, Lang Hancock, discovered minerals that helped make Australia the world’s biggest iron-ore exporter, while Rinehart, through Hancock Prospecting, has forged joint venture agreements with Rio Tinto Group for operations in Western Australia’s Pilbara region.
The value of the assets Rinehart inherited from her father almost 20 years ago has been driven up by Chinese demand for raw materials, which created the biggest resources bonanza since a gold rush in the 1850s. She now has an estimated wealth of $18.6 billion, according to Bloomberg’s Billionaires Index.
Among women, Rinehart ranks behind only Wal-Mart Stores Inc. heiresses Christy and Alice Walton, L’Oreal SA (OR)’s Liliane Bettencourt, Mars Inc.’s Jacqueline Badger Mars and Iris Fontbona, matriarch of Chile’s richest family. Rinehart accumulated more of the family wealth than the dynasty’s founder.
To contact the reporter on this story: Elisabeth Behrmann in Sydney at email@example.com
To contact the editor responsible for this story: Jason Rogers at firstname.lastname@example.org