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Lang Hancock, The Bulletin, May 17, 1983, pp. 106-10.

While everyone else dithers, WA iron ore magnate LANG HANCOCK has written to The Bulletin with his plan to revive the economy.

If the “grand corroboree” does nothing else, it should demonstrate to the public why resource-rich Australia is sinking fast into an unnecessary depression, fuelled by characterless leadership from the business world and ineptitude from the political sphere. The exception is the lone voice of Joh Bjelke-Petersen.

The Summit was a PR boost for Bob Hawke, a field day for the socialist reporters (all vying with one another to inherit the mantle of King Canute’s courtiers) and a blank cheque for the unions, paving the way for a total trade union dictatorship of Australia — probably within 10 years. No solutions were found to our country’s problems yet, as I have claimed repeatedly, there is a way out of this mess.

I am now even more certain that I have an answer which could be implemented because of the unique circumstances Western Australia finds itself in since the last State election. Never in my lifetime has a Premier (Brian Burke) been given such a chance to act as a statesman and not as a politician.

As well as sitting on a resource in the undeveloped Hamersley iron-field, bigger in value than the Saudi oil, he has probably the best untouched source of tourist revenue in Australia lying idle at Wittenoom. In addition to which, there is a chance to become the mineral power house to the Western world if Russian infiltration of Africa is successful in cutting off the world’s life-sustaining mineral flow from the Dark Continent.

Because the WA Liberal Party is bereft of a philosophy, a policy or a dynamic leader in either the political or lay wings, while its coalition has gone bankrupt, the Burke Government can expect a minimum of 12 years of unbroken rule by which time the Premier will still be under 50 years.

In view of the above circumstances, we could have a WA-led recovery, as the present government can ignore everything except that which is best for Western Australia.

It can ignore the public, the media, the lobbyists and the minority groups. It can row against the tide with complete confidence, because the majority is nearly always wrong.

The WA Government has a unique chance of burying a tragic past mistake as occurred when their predecessors turned down the Ludwig proposals of 1964. They now have an opportunity to have installed, without any effort on their part, the Ludwig-type proposals repeated in 1983.

(The American billionaire shipping magnate Daniel K. Ludwig’s National Bulk Carriers proposed a vast ferro-manganese and iron ore exporting project requiring a new port on the north-west coast at Cape Kerauden. The project envisaged nuclear explosions to create the port but after continuing opposition he sold the last of his iron ore interests in 1971. During this time he also put together the Clutha Development coal operations on the east coast of Australia which he sold to British Petroleum for $331 million in 1976-77.)

If they adopt this course it could lead to the much grander exploitation of this great natural resource by enabling the transport by land and sea of huge tonnages of cheap ore. This means the Ronard downhill railway concept of minimum 250,000 tonne ships on a year-round basis used to replace vast tonnages of low grade 30 percent ore.

However, unless it is understood that, in the Pilbara iron province, Australia has a natural resource which could be wealth and revenue-producing for a longer period than the whole of Middle East oil, any conclusions can only be of a superficial nature.

At present this giant resource is being exploited to a minimum extent by four operating companies. Two of these companies must be short-lived because of (a) inadequate reserves and (b) inferior ore.

All are tied to a shrinking market controlled by the Japanese cartel. All have their horizons limited by preoccupation with the Japanese market which is about one-tenth of the total world consumption of iron ore.

In the past, this short-sighted outlook has been encouraged by the inadequacies of Australian governments, State and Federal, whose political horizons have been limited to preserving the small town of Port Hedland, inadequate ports and a couple of miners whose policies are not in any way in sympathy with Australian aspirations; in fact none of them has iron as their main source of income.

The existing mines have sacrificed a position as the world’s number one iron ore producer. They are facing continual decline which can be staved off only temporarily by mining the best of their deposits in order to deliver higher grade ore to the Japanese.

Instead of feeding the same old claptrap to the public each year that normally flows from the conservative and Labor parties (with the main focus on political nit-picking), why not come up with something that is constructive, original and imaginative?

Charlie Court (Sir Charles Court, former WA Premier) made a lot of mileage by saying he had a Pilbara plan. When John Tonkin came to power, despite an exhaustive search of all available files, he found that no such animal existed. Sir Alan Westerman and a Canadian then designed a Pilbara plan. I have forgotten how many billions of dollars of taxpayers’ money it would have cost to implement.

Why not frame a program which will cost the taxpayer nothing but which will show the public that the new WA Government is not preoccupied with trivia but, on the contrary, is not only more active than its predecessors but more imaginative and more constructive in being job-creative on a large scale? What has the WA Government got to lose by trying some of the many innovations that I can suggest after living for nearly three quarters of a century on this Earth, most of it in the north of Western Australia?

They could make a start by sanctioning the Ronsard port concept for jumbo ships built at the end of a downhill railway to free the WA iron field from Japanese control.

The opposition to getting Ronsard going will come from: (a) the WA bureaucracy; (b) the four existing producers; (c) Canberra through export licence control activated because of lobbyists from the existing producers.

The plan, which I have outlined many times, should overcome the above problems if implemented courageously.

Seeing that in socialist countries, in communist countries, in most dictatorships and in Australia — because in Australia socialist practices are rife — we must accept that minerals in law belong to the “State,” we must also accept that in government hands they are non-revenue producing and must remain so until large sums of risk capital are brought to bear on their extraction.

While it is not possible, at the moment, to depart from the restrictive principle of “State” ownership, it does seem possible to make some of the Pilbara iron deposits heavily revenue producing by bringing them under “free enterprise” control.

As a first step, the Premier should try desperately to convince Federal Treasurer Keating of the prospective monster revenue haul, plus indirect tax yield from employees (who at present don’t exist), that lies awaiting in WA. The Treasurer must also be made to understand that “tax on nothing is nothing” which is the situation with our major resources at the moment.

To this end it is essential to get John Stone, Geoffrey Yeend, Keating and Hawke up north with me to see at first hand the amount of non-revenue earning mineral that is lying uselessly in the ground and some of the multi-billion dollar projects that could be job-creative. For instance:

Pilbara iron ore production has been cut from 120 to 80 million tonnes a year approximately. If we started another mine the size of Mount Newman, the figure could be restored to 120 million tonnes a year without waiting for a Japanese upturn but, instead of this, the figure will be cut still further — unless the Ronsard concept is started.

Eighty million tonnes a year from existing producers with 11,000 employees benefits the Federal and State Treasuries to the following extent, approximately:

FEDERAL:
$64,000,000 gross income tax

— $5800 per employee
$62,000,000
— Unemployment benefit saves for 11,000 people

STATE:
$12,000,000 payroll tax

— 5% payroll tax on gross wages
$64,000,000 royalties
— .80c a tonne royalties
$6,000,000
— Sales tax at rates varying from 7.5% to 32.5%

Total
$208,000,000

While it may be a necessary evil in politics to “grandstand” to the lunatic fringe, to prevent Tasmania from reaching its full potential by denying it expansion of cheap power resources and consequent job-creation, to play-act to the brainless by staging vaudeville acts such as the Summit, these will do nothing constructive to get Australia back on the road. Whereas if the Prime Minister will take heed of the following he could go down in history as the man who dragged Australia out of the worst depression in its short history.

At no time should capital from taxpayers’ pockets be used and put at risk but private risk capital must be attracted in unlimited quantities both from without and within Australia. Capital in Australia has gone on strike because of high taxation and some thousands of restrictive laws — local, State and Federal. This stagnation must be broken.

It needs billions of dollars of capital which could be raised by a deliberate anomaly in the “Income Tax Free Scheme” I have long advocated.

Declare north of the 26th parallel of WA, NT and an area of north-west Queensland to be a frontier area and to be income tax free for a trial period of 20 years, with a reinvestment clause of 40 percent for capital only. The reinvestment clause not to apply for wage and salary earners who would thus become 100 percent income tax free right from their first pay packet. Such an anomaly would go a long way towards curing strikes in the Pilbara which would be a gain to industry and the Treasury.

This income tax free anomaly which I propose would be instrumental in reducing strikes:

STRIKE COSTS
$125,731,788 gross wages LOST
$30,427,692 income tax LOST
$6,286,589 payroll tax LOST
$2,750,000 sales tax LOST
$850,900,000 foreign sales LOST

The above is calculated on 1979 strike statistics.

(The Japanese told me that the long Hamersley Iron strike cost their steel industry $700 million because of having to buy on the “spot” market from other sources, with larger and more costly freights. Unfortunately Japan has been since understandably fostering these other sources at our expense.)

Over the past 30 years, I would guess, there has been an average of something like 300 laws a year passed through the Federal parliament and goodness knows how many Acts and Regulations have gone through the lower levels of government — State and local. It is doubtful if any of the above have actually achieved the purpose for which they were designed. It is equally doubtful if even 1 percent of these laws were properly understood by any of the members who passed them. In fact the Senate recently found that they had actually passed the wrong Bill.

The effect of so much legislation is that it has strangled business initiative and enterprise, so much so that we have complete stagnation throughout Australia. Capital has gone on strike.

In short, the only section to benefit by this veritable deluge of legislation is the bureaucracy which, as a result of it, has been able to expand in power and size according to Parkinson’s Law.

To start the Kambalda nickel mine, which is Australia’s biggest, only two permits were necessary. Now to start a major mine, 30 different authorities have to approve.

Nearly all of the above abuses grew under Liberal rule so if the Labor Party is genuine in its belief in socialisation of the industry, the best way to achieve it would be to hand over government to the so-called Liberal Party.

Western Australia will not progress very far under any government unless it abolishes environmental protection agencies.

Had they been in existence a few years ago, such things as the Snowy River scheme, the Sydney Harbour Bridge, even the Sydney Opera House, would never have been built!

If you like to turn to the West Australian scene, there is no way that the Kalgoorlie water scheme, Mandaring Weir, the Canning dam, Fremantle harbour or the Transcontinental Railway would have been built if they had had to contend with environmental protection bodies.

If you care to examine the situation carefully, you will find that the Western world’s present depression has been caused by the upsurge of environmentalism in the United States.

Bureaucratic restriction on power development turned the world’s largest economy into a competitive bidder in the world’s oil market, giving rise to OPEC with its four-fold increase in the price of oil.

This meant that heavy importers of oil, such as Germany and Japan, had to use a disproportionate amount of their foreign exchange to buy oil, just to keep themselves afloat, so their ability to buy goods from the rest of the world was proportionately lowered, hence the slump in world trade.

Most leaders of government seem to be too frightened to leave Canberra (except for junkets overseas) for fear that it may become too readily obvious that they are not indispensible.

However, if they can be persuaded to come and see the latent riches of the Pilbara with me, it would be a first step towards my being able to attract some of the world’s past principals in enlisting their aid in lifting Australia out of this unnecessary depression.

*****
Lang Hancock, “Breadth of vision,”
The Bulletin, June 14, 1983, p. 10, as a letter to the editor.

In replying to the attempt by Mr D. Stewart (Bulletin, May 31) to knock the downhill railway/Ronsard jumbo port concept, he seems to be under the impression that the world has stood still even since the iron ore industry parted company with him. Does he believe that the world’s going to be limited to four ports for ever?

Instead of boring your readers with an item-by-item refutation of his many mis-statements and misconceptions, it is sufficient to point out that — in saying that there are only four ports in Europe which can receive larger than 150,000 dwt ships — apparently Mr Stewart has never heard of Hunterston (300,000 tonne ships). Nevertheless, the facts are that Narvik (in Norway, serving Sweden), Australia’s biggest competitor in Europe, can service 250,000 tonne ships. Surely Australia should not be satisfied to stand still but should aim to equal, if not exceed, the Swedes whose main mine at its peak was producing more iron ore from great depths underground under shocking climatic conditions than Tom Price produces by open cut.

In saying that the Ludwig proposal fell by the wayside for lack of economic justification to finance it, I am afraid Mr Stewart has really put his foot in it because the total financing was to be done by Ludwig. (Western Australia could have had a large share of the $1000 million that he spent in Brazil.) Furthermore, he was going to place an order for six ships which were three times the size of those currently in use in the world’s iron trade at that time. To put this matter in perspective, this was the equivalent of 26 Queen Marys.

I fear that Mr Stewart’s negative approach will not do much to help solve Australia’s problems.

LANG HANCOCK
Perth WA

(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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