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Excerpts from Lang Hancock’s Wake Up Australia (Sydney: Dwyer, 1979).

Wake Up Australia

Most people pass their days with no thought of the role mining plays in their lives. In fact, it never enters their heads that without mining they could not live.

The great bulk of people have probably never seen a mine and yet it is the foundation of their very existence with an impact that touches on everyone’s life. How could we live today without motor cars, telephones, television and modern medicine?

Imagine a world without steel, aluminium or glass. Without minerals we could not harvest our food, till our soil, build our machines, supply our energy, transport our goods or maintain any society beyond the most primitive. Our horn of plenty starts with a hole in the ground.

We are in great trouble if we forget it, and people in Australia, particularly in Canberra, and government circles generally, have forgotten it, whilst it would seem that the western world generally has never realised it.

Throughout history civilisations have been shaped by the use of minerals. Mineral supplies have determined the rise and fall of empires, patterns of populations and the evolution of human enterprise in industry and rising living standards.

Big Government The Killer

Before we can wake up we will need to outlaw the drug (big government) which has put us to sleep, no matter how uncomfortable or embarrassing the withdrawal process may be.

I don’t think anyone can deny that Australia is in an economic doldrum and getting worse, which is inexcusable considering our natural wealth, but which is inevitable because of the form of misgovernment in which we (in common with much of the western world) are hogtied. Describing our form of government as democracy is a misnomer; in practical application it is the most diabolical form of dictatorship imaginable — economic dictatorship.

Irrespective of what party is in power or who leads them, Australia is heading for bigger and bigger government with more and more restrictive controls, forcing us even further down the slippery slope to total socialism.

How to Develop Our Wealth

If we want huge capital investment in the north of Australia […] we must join in the international incentive race to make it worthwhile for capital to come in to develop our raw materials.

We have to raise the wind on the international money market, and do it so effectively that the wind we raise becomes a cyclone, blasting hundreds of millions of dollars into circulation north of the 26th parallel.

The proven method that has worked elsewhere in the world is to declare an income tax holiday. For example, in 1940, Puerto Rico had no factories and no capital. The administration decided to make Puerto Rico tax free. In came the capital, big and small, for everything from roads to brassieres.

Tax Holiday

“Operation Bootstrap” they called this tax free policy. In 17 years it brought Puerto Rico 667 factories, 80,000 new jobs and the expectation that by 1975 there would be 2,500 factories and a standard of living equal to the United States 1960 standard. In came General Electric, Maidenform, Union Carbide, Parke Davis, Remington Rand, and so on. In the 1950s and 1960s, Puerto Rico experienced a German-like economic miracle. But in the early 1970s the economy sputtered and then, with the quadrupling of oil prices, economic growth disappeared because at the behest of a blue ribbon committee of American economists, bankers and financiers, Puerto Rico raised taxes. The theory was that the increased taxation would reduce inflation and dampen consumer spending.

The programme was a flop. The economy continued to “sit down” as Puerto Ricans put it. In 1976 voters threw out the incumbent governor and his party.

Thanks in large part to the incoming ruler’s tax cutting moves, Puerto Rico’s economy is reviving. After experiencing no growth in 1974 and 1976, it expanded almost 5% last year and should do even better this year.

What makes the new governor’s actions more noteworthy is that, under their constitution, the budget must be balanced. The Government has therefore little margin for error. (Australia please note.)

Action Needed

The sensible way to develop Australia’s richest […] (without cost to the taxpayer) would be to declare north of the 26th parallel of Western Australia, the Northern Territory and a part of north-western Queensland (to be defined), a frontier country, (free from government controls) and in that frontier create a deliberate anomaly of a 100% income tax free holiday for a trial period of 20 years, with a 40% re-investment clause applicable to capital only, in order to qualify for this 100% income tax immunity.

Wage and salary earners would be exempt from this re-investment provision so that they would get the benefit in their first pay envelope.

Such a scheme would attract capital “know-how” and highly qualified technicians from all over the world, as well as from within Australia from those living south of the 26th parallel.

The point to remember about this is that it is to apply to income tax only, so that if this tax is foregone in order to get the scheme going, developments would soon snowball to the point where the indirect tax exceeded by far the amount of income tax not collected from current businesses. In other words a plus for the Treasury.

In addition, once new projects were developed they would generate their own field of ever-mounting indirect tax flowing to the Treasury. In this way no one can say we are asking for a big hand-out scheme. What we are asking is for the Australian government to be business-like and forgo a spra?y in order to catch the biggest mackerel in the sea.

No one is suggesting that the scheme is fair and equitable. (It wouldn’t work if it was). A deliberate anomaly must be created so that people south of the line think they are getting something for nothing by moving north.

No one is asking Canberra for a giant hand-out to promote some white elephant scheme. On the contrary, the government is being offered a development scheme for the north and the means of self-preservation for the whole of Australia; free gratis and for nothing as far as the taxpayer is concerned.

Surely […] it is not asking too much of leadership to display a little courage by making the north income tax free for a trial period of twenty years.

Tax on Nothing Is Nothing

In the instances where this move became successful in starting up new projects the gain is 100% to the Treasury because the tax on nothing is nothing. In other words, mineral lying unworked in the ground pays no tax, pays no royalty, creates no jobs, earns no foreign exchange.

By comparison, let’s look at a recent year’s tax from one of the areas biggest mines:

  • $22.8 million was profit after tax of which
  • $12.9 million was paid in shareholders dividends upon which the Treasury reaped tax.
  • $11.9 million royalty
  • $5 million payroll tax, plus sales tax,

and excise duties on the millions of dollars worth of equipment the mine buys, plus stamp duty, land tax and profits from rail freight charges, not forgetting that the Treasury also receives all the indirect taxes on everything that the employees buy. These indirect taxes would increase from existing projects as well as springing into being from minerals at present unworked and yielding nothing if my income tax free development proposals were implemented.

Parkinson’s Law the Killer

The fact that nothing has been done on a government level to develop the most vital part of Australia is not because there are not intelligent people in Canberra (far from it) but simply because the tax-free scheme does not appeal to the self-interest of those in influential places. For instance, it does not envisage the rapid expansion of any large government department, whilst as a source of votes in the political field, the Pilbara has not got a single representative in the Federal Parliament.

No Alternative

It is worth mentioning that since the tax-free scheme for northern development was first rejected some years ago, no one has come forth with any intelligent alternative method of developing our north.

In other words, Canberra must create a favourable climate attractive to risk capital. If it is to be effective all harmful restrictions must be removed and the government would need to declare:

  1. An absolute guarantee of security of tenure from the discovery right through to the production stage;
  2. That there will be no more Fraser Island repudiations;
  3. That export licences have been dispensed with henceforth;
  4. That the Foreign Investment Review Board is abolished and that there are no restrictions on the amount of foreign ownership of raw resources ventures;
  5. That the Variable Deposit Rule has been abolished;
  6. That there will be no more super tax levies such as the $6 per ton levy on certain coal mining companies just because they have made good profits;
  7. That there will be no “resource” tax;
  8. That the Government will honour agreements henceforth.
  9. That retrospective tax legislation will not be countenanced;
  10. That mining which is the basis of all civilisation must not be molested by environmental lobbies;
  11. That the rules won’t be changed once the ball has bounced;
  12. That our internal cost structure will be lowered by an across the board tariff reduction, at least equivalent to the amount of devaluation of the $Aust.

Nor-West Shelf

Unless the above guarantees are forthcoming from our government, can anyone except the more gullible of creatures, imagine that a hard headed consortium is going to invest billions of dollars is a high risk closed loop operation such as the Nor-West Gas — especially when competitive governments have a far more realistic approach to capitalism than do Australian governments at present. Such is the dominance of the real government over our elected representatives that according to Viv Forbes:

Politicians seems to think that oil is produced by taxes, levies, enquiries, commissions, regulations, export controls and senate standing committees.

At best these activities merely use up energy. Unfortunately they also deter exploration, defer development and restrict production. They also distract producers who are forced to spend valuable time and energy preparing submissions, appearing before tribunals, educating bureaucrats, and apologising to the media for their profits.

There are at least 10 State and Federal departments promulgating contradictory and often inept energy policies. In addition there are four Federal energy standing committees continuously debating all aspects of energy plus the Australian Science and Technology Advisory Council. As if this was not enough Canberra has appointed a new National Energy Advisory Committee consisting of 7 professors, 5 public servants, 2 laymen, 1 unionist, 1 energy consumers, 1 energy producer, and not one explorationist.

Should anyone be considering using foreign capital to build an oil refinery the approval of at least ten more government departments is required. We are approaching the time when the weight of submissions required for any project will exceed the expected production of oil.

What needs to be recognised is that government activity can never increase production of anything except laws, and red tape.

The role is entirely negative.

(in order of appearance on Economics.org.au)
  1. Ron Manners’ Heroic Misadventures
  2. Hancock's Australia
  3. Hancock on Government Help
  4. Wake Up Australia: Excerpts Part 1
  5. Wake Up Australia: Excerpts Part 2
  6. Lang Hancock's Five Point Plan to Cripple Australia
  7. Governments Consume Wealth — They Don't Create It
  8. Up the Workers! Bob Howard's 1979 Workers Party Reflection in Playboy
  9. Jump on the Joh bandwagon
  10. John Singleton and Bob Howard 1975 Monday Conference TV Interview on the Workers Party
  11. Governments — like a red rag to a Rogue Bull
  12. Lang Hancock's Pilbara-Queensland Railway Proposal
  13. Singo, Howard and Hancock Want to Secede
  14. Lang Hancock's Foreword to Rip Van Australia
  15. New party will not tolerate bludgers: Radical party against welfare state
  16. Small and Big Business Should Oppose Government, says Lang Hancock
  17. A Condensed Case for Secession
  18. Hancock gets tough over uranium mining
  19. Hancock's threat to secede and faith in Whitlam
  20. PM's sky-high promise to Lang
  21. Lang Hancock: "a catherine-wheel of novel suggestions"
  22. Govt "villain" in eyes of new party
  23. The spread of Canberra-ism
  24. Govt should sell the ABC, says Lang Hancock
  25. 1971 Monday Conference transcript featuring Lang Hancock
  26. Aborigines, Bjelke and the freedom of the press
  27. The code of Lang Hancock
  28. Why not starve the taxation monster?
  29. Lang Hancock 1978 George Negus Interview
  30. Party Promises to Abolish Tax
  31. Right-wing plot
  32. "The best way to help the poor is not to become one of them." - Lang Hancock
  33. WA's NCP commits suicide
  34. "You can't live off a sacred site"
  35. Hancock: King of the Pilbara
  36. Bludgers need not apply
  37. New party formed "to slash controls"
  38. Workers Party Reunion Intro
  39. Workers Party is born as foe of government
  40. Government seen by new party as evil
  41. Ron Manners on Lang Hancock
  42. Does Canberra leave us any alternative to secession?
  43. Bury Hancock Week
  44. Ron Manners on the Workers Party
  45. Lang Hancock on Australia Today
  46. Hancock and Wright
  47. Lang Hancock on Environmentalists
  48. Friends of free enterprise treated to financial tete-a-tete: Lang does the talking but Gina pulls the strings
  49. Lang Hancock, Stump Jumper
  50. Lang Hancock: giant of the western iron age
  51. The Treasury needs a hatchet man
  52. We Mine to Live
  53. Get the "econuts" off our backs
  54. 1971 Lang Hancock-Jonathan Aitken interview for Land of Fortune (short)
  55. Gina Rinehart, Secessionist
  56. 1982 NYT Lang Hancock profile
  57. Enter Rio Tinto
  58. Hamersley and Tom Price
  59. News in the West
  60. Positive review of Hancock speech
  61. Lang Hancock International Press Institute General Assembly speech, Canberra, 1978
  62. Australia's slide to socialism
  63. The Great Claim Robbery
  64. Why WA must go it alone
  65. Lang Hancock in 1976 on Public Picnics and Human Blights
  66. MILLIONAIRE PUTS MONEY BEHIND SECESSIONISTS
  67. Resource Management in Australia: Is it possible?
  68. The gospel of WA secession according to Lang Hancock
  69. Crystal Balls Need Polishing
  70. Minerals - politicians' playthings?
  71. John Singleton-Ita Buttrose interview (1977)
  72. Boston Tea Party 1986 style, hosted by Lang Hancock and Bob Ansett
  73. Singo says Lang Hancock violated Australia's 11th commandment: Thou Shalt Not Succeed
  74. Singleton: the White Knight of Ockerdom
  75. Tactics change by Hancock
  76. Lang Hancock complains to Margaret Thatcher about Malcolm Fraser
  77. 'Phony crisis' seen as 'child of politics'
  78. Lang Hancock on nuclear energy
  79. Lang Hancock beats the left at their own game on civil liberties
  80. Lang Hancock's Favourite Books
  81. 1977 Lang Hancock Canberoo poem
  82. Hancock's playing very hard to get
  83. Hancock proposes a free-trade zone
  84. An Open Letter to Sir Charles Court
  85. John Singleton 1976 ocker Monday Conference Max Harris debate
  86. Lang Hancock in 1984 solves Australian politics
  87. Lang Hancock on the Workers Party, secession and States Rights
  88. Lang Hancock asks what happened to Australia's rugged individualism?
  89. Precis of Ludwig Plan for North-West
  90. Announcement that Lang Hancock will be guest of honour at the Workers Party launch
  91. Lang Hancock's March 1983 attempt to enlist "former presidents of nations and heads of giant companies" to save Australia
  92. Lang Hancock asks us to think how easily environmentalists are manipulated for political purposes
  93. Invest in free enterprise
  94. Democracy is dead in Australia and Lang Hancock's education
  95. Lang Hancock Incites Civil Disobedience
  96. Hancock sounds call to battle Canberra
  97. Mining policy a threat
  98. Over Whitlam's head
  99. Lang Hancock suggests that newspapers don't give space to politicians unconditionally
  100. Lang Hancock on saving Australia from socialism
  101. Secede or sink
  102. Australia can learn from Thatcher
  103. John Singleton. Horseracing. Why?
  104. How Lang Hancock would fix the economy
  105. Lang Hancock: victim of retrospective legislation
  106. Lang Hancock supports Joh for PM
  107. Hancock seeks miners' tax haven in the north
  108. The Ord River Dam
  109. Why Lang Hancock invested in Australia's film industry
  110. Lang Hancock's 1983 letters to The Australian: Lang's precedent for Steve Jobs, renaming the Lucky Country to the Constipated Country, and more
  111. Australia's biggest newspaper insider on manipulating the media
  112. 1980 Lang Hancock-Australian Penthouse Interview
  113. Canberra: bastion of bureaucracy
  114. Pilbara can be the Ruhr for South-East Asia
  115. 1982 Lang Hancock-John Harper Nelson Interview
  116. Australian elections are one of the greatest con games in history
  117. Our leaders are powerless
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