You don’t own the minerals.
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.