The States do UPDATED: It’s worse than I thought

You don’t own the minerals.

Julia Gillard stating the bleeding obvious.

Then she told the annual mining dinner.

“Governments only sell you the right to mine the resource,” she said.

“A resource we hold in trust for a sovereign people.

“They own it and they deserve their share.”

That’s what the WA government has been saying, more or less, all along. They own the minerals and they want their share.

The best line is this:

And this is Australia, and it has a Labor government.

Indeed – but not for very much longer. Centrebet has the ALP at $5.40 to win the next election.

This speech is for domestic political consumption; the kind of bluff and bluster that we’ve come to expect from this government. Simply picking up the theme from her union paymasters

I thought we were actually attacking these guys at the moment.

This speech will go down like a lead balloon. It reminds me very much of a similar speech Kevin Rudd gave, to the press gallery ball, right before he got the flick.

The genuine show stopper though was saved up for the resources industry, a longtime mid-winter ball sponsor. The Minerals Council of Australia and their guests sat at the front of the room. The miners were informed by Rudd: ”Can I say guys, we’ve got a long memory.” It can be assumed they know he’s the Prime Minister, that Prime Ministers are very powerful, and can deliver significant retribution if warranted. Possibly they didn’t need it spelled-out in such naked terms, but there you have it.

The bottom line is this – tax-paying, royalty paying, law-abiding business people do not want to hear that the government can tax the fruits of their capital and labour with impunity simply because there is a Labor government in office and they don’t own the minerals. That is an open invitation to start worrying about sovereign risk.

Update: Noodle emails to say that my interpretation of Gillard’s speech is too soft.

I think it is really much much worse than what you say. She’s just announced a new property rights regime for minerals in Australia. She says

“Governments only sell you the right to mine the resource. A resource we hold in trust for a sovereign people. They own it and they deserve their share.”

To my mind she’s clearly talking about the situation where a company is already digging up the minerals. At that point, it is the property of the leaseholder – not the State Government or the Federal Governent or the “sovereign people”.

I think Noodle is correct. He points to the NSW Mining Act (emphasis added)

11 Property in minerals lawfully mined

(1) For the purposes of this or any other Act or law, it is declared that any mineral that is lawfully mined becomes the property of the person by or on behalf of whom it is mined at the time the material from which it is recovered is severed from the land from which it is mined.

I found this in the WA Mining Act (emphasis added)

(1) Subject to this Act and to any conditions to which the mining lease is subject, a mining lease authorises the lessee thereof and his agents and employees on his behalf to —

(a) work and mine the land in respect of which the lease was granted for any minerals; and

(b) take and remove from the land any minerals and dispose of them; and

(b) owns all minerals lawfully mined from the land under the mining lease.

What Gillard said tonight is at odds with the State law that governs mining.

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34 Responses to The States do UPDATED: It’s worse than I thought

  1. splatacrobat

    And this is Australia, and it has a Labor government.

    And we are us so don’t you forget it!

  2. Gab

    Julia Gillard stating the bleeding obvious.

    in that irritatingly patronising voice of hers.

  3. Sleetmute

    Even otherwise moderately intelligent people fall for this idea that government should tax minerals companies’ profits more because the people own the resources. What an irrelevant notion. Government also educates most workers so does mean that it should tax industry X by more because it makes use of tertiary educated workers? So long as there is free entry into an activity, there is no case for a super-profits tax on that activity.

  4. Pickles

    Start worrying about sovereign risk? Its a bit late for that .

  5. Louis Hissink

    If Gillard thinks we think we own the minerals, then she has a big problem, apart from the hubris that comes from delaying Thomson’s just desserts.

    And I’ve news for Lady Gillard – risk capital for exploration has more or less dried up – plenty for Africa or elsewhere but not here.

    And I do wish she describe her gubmint as socialist and not labor.

  6. Alex Pundit

    Saying that the ‘minerals belong to the people’ is Communism. Plain and simple

  7. Samuel J

    Rio Tinto’s CEO in reply

    At the end of the day we do all share the common goal of advancing Australia’s growth and national prosperity and the wellbeing of its citizens

    WRONG! The Gillard Government’s goal is reducing Auslralia’s growth and national prosperity by stealing taxpayers’ money for ALP hacks and Unions.

  8. Mick Gold Coast QLD

    Comrade Bogan Broadasks is determined to top Comrade Keating’s “banana republic” gem, to drive even more capital investment even further away.

  9. Samuel J

    Julia H. Chavez is signaling she will be expropriating wealth from mining companies like her hero Hugo.

  10. Gab

    “They own it and they deserve their share.”

    Fine. Let them go and invest in exploration, dig up the earth, mine and process the minerals, sell them and pay taxes and royalties. There. It’s now theirs.

  11. Mother Hubbard's Dog

    These are grubby, nasty and above all little people. Seething with jealousy and resentment over the achievements of their betters.

  12. Cato the Elder

    This crap always sets my teeth on edge; and she’s a lawyer who could figure it out if she bothered.

    The minerals, while part of the land, belong (in theory) to “the Crown” in right of the relevant State or Territory. In practical terms, they are owned by the State governments, as they control the asset (and Lizzie has other things on her plate).

    Once out of the ground the minerals belong to the miner. That’s why they can sell them. The mining tenure gives them the right to dig up and take away, you red-headed clod.

    In the ground the minerals have no utility except as pretty colored dirt. The miner adds value (by digging them up) and makes a profit by doing so. How hard is that to understand?

    Oh yes, destroy the Greens.

  13. C.L.

    And this is Australia, and it has a Labor government.

    LOL.

  14. JC

    Just listen to her. Where’s the speech backing our most efficient industry. The one that has helped produce some of the highest living standards in the world?

    This is what passes for a PM speech these days to an industry body.

    They are so fucking primitive it’s almost funny. Just primivitism.

  15. C.L.

    The thing that annoys me most – that REALLY annoys me – is the idea that Australians don’t get any benefits from mining unless they’re owners or on-site workers. The mining boom is to everyone’s benefit already and massively so. But lefties cannot leave well enough alone. They must be seen to be ‘spreading the wealth around.’ This is what the party of Peter Walsh has become.

  16. .

    The ONLY reason why we don’t have allodial title in Australia (and also why miners and farmers are at odds with each other) is because the Crown and the colony Governments got greedy.

    This accident of history should not be used to let Julia make her heist.

  17. Megan

    And this is Australia, and it has a Labor government.

    They think this passes for statemanship. A snake oil salesman would be ashamed.

  18. Gab

    Tony Abbott’s address to the Minerals Council today:

    Ladies and gentlemen, it is good to be here because I am acutely conscious of the debt that every Australian owes to the minerals sector. We depend upon those ore carriers travelling north as surely as our forebears rode on the sheep’s back. Australia’s prosperity now, for the foreseeable future and for much of the recent past has critically depended upon the work of the minerals sector. You may only directly employ 200,000 of us. You may only indirectly employ 600,000 of us. You may only be about eight per cent of our gross domestic product but you are fully 54 per cent of Australia’s exports to the rest of the world and our prosperity critically depends upon our ability to pay our way in the world and we pay our way in the world because of you. This is a fundamental fact and it must never be forgotten by policy makers. Not only does your hard work and your success underpin the prosperity of every single Australian but in an important sense you have been nation builders as well as wealth creators. Since the mid 1960s no fewer than 26 towns, 12 ports and well over 2,000 kilometres of new railway line has been built and sustained by the mining industry and it’s so important that we do whatever we reasonably can to keep that going.

    Governments don’t create prosperity. Business creates prosperity. No country ever taxed itself into prosperity.

    Positive. Prime ministerial. Encouraging.
    Unlike the Harridan-in-chief.

  19. Infidel Tiger

    And this is Australia, and it has a Labor government.

    Less than 500 days to go. We’ll survive.

  20. JC

    Aren’t the speeches just fucking striking, Gab? Look at the contrast in the difference in intellectual girth between them. Freaking amazing.

  21. Gab

    Back when the mining tax was passed I remember Gillard saying that the “minerals are owned by the Australian people 100%” so it would not surprise if she did do a Chavez in the future, should she get elected.

  22. perturbed

    And this is Australia, and it has a Labor government.

    That may have meant something under Hughes or Chifley or even Hawke, but it means nothing now. Keating began the trashing of Labor, Rudd kicked over the can, and Gillard is sorting through the burst bags like a squawking seagull for what she can grab before the Australian voters come to shoo her off.

  23. Mike

    “Centrebet has the ALP at $5.40 to win the next election”

    Sportsbet ALP $7.00, Coalition $1.10

  24. Dan

    What’s incredible is that Labor have fought this battle before and lost, what has significantly changed for Gillard to think she will win the advertising war this time around?

    Are we going to invade China, tear down their buildings and take all our steel back? Nothing is impossible when you have a deranged effwit for a PM

  25. Dandy Warhol

    I keep waiting for this mob to hit bedrock. But somehow they manage to just keep digging themselves deeper.

  26. maurie

    How long before these idiots decide to repeat their old stupid actions & get their ministers negotiating mineral prices? It was a resounding success before – only if you ignore reality & believe the labor dopes.

  27. Winston SMITH

    Mind you, it would bloody well help if the big three miners started acting as part of an Australian industry.

  28. candy

    it is wearying to be kept being told we have a Labor government with Labor values with a Labor budget.
    like the rest of us who don’t vote Labor just don’t matter.

  29. Feral Abacus

    Just take me back to the golden era of 1996-2007 when we had adults running the country, not these poop-hurling toddlers.

  30. Anne

    Gab, 10.42
    “Fine. Let them go and invest in exploration, dig up the earth, mine and process the minerals, sell them and pay taxes and royalties. There. It’s now theirs.”
    Can you give me a heads up when that’s likely to happen so I can sell my stock!

  31. .

    I would have been kind Feral and said 1983-2007.

    A tribute to that era from a great Australian

  32. Pingback: In Australia, we are good at deceiving ourselves….. — Winds Of Jihad By SheikYerMami

  33. blind freddy

    Here’s a story presented in such a way that even Gillard will understand, teaching the value of honest toil and reward for effort. Ironically it is called ” The Little Red Hen”
    http://www.enchantedlearning.com/stories/fairytale/littleredhen/story/

  34. Lawrie

    It’s strange that Tony Abbott’s speech which is so much more prime ministerial is not reported by the luvvies in the press gallery. Instead we are constantly reminded by those brain dead hacks that Tony Abbott is really unelectable and that the people hate him (Koch on Sunrise. It’s obvious that the luvvies don’t like the idea they are backing a complete failure. David Marr still thinks Kevin and Julia’s great money splash “saved Australia” from the GFC rather than put us in debt and reduced our ability to face GFC MkII.

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