Hanging on to our assets

The hero of all capitalists, Adam Smith, was adamant that excess savings should not flow between countries or, in effect, between currencies. Yet the USA has, despite being a major debtor nation, been able to purchase Edgells, Arnotts and major coal and other assets in Australia. Surely that indicates there is something that needs rectifying.

There has been vicious action by the mining companies in opposition to the proposed mining tax. Let me draw a parallel between the depletion of the oil resources of the USA and what is happening to our own oil, coal and mineral resources. The production of oil from USA wells is now less than 30 per cent of its peak in the early 70s. Shouldn’t the USA have made provision from the asset value of its oil resources as these were exploited to ensure that long life replacement power and fuel sources were developed? That would have required a massive royalty or tax charge on those exploiting the oil over the whole life of the reserves. Shouldn’t we collect royalties and taxes to ensure that those exploiting our resources do not leave Australia worse off in the future?

As for employment and capital expenditure in the resources industries, wouldn’t we better off if Australia let others deplete their own resources faster than we deplete our own? The industry leaders bleat that we need foreign capital. Australia only needs foreign currency to pay for items which we do not have the technology or capacity to produce ourselves. Most of the capital they wish to import is surplus profits generated from our own resources.

I make no claim to knowing all the answers or even knowing and understanding all the problems but as I wrote to a newspaper in January, 2007, “Next Keynes, where are you?” We need some competent people, led by someone of Keynes’ capabilities, charged with thinking long term. We also need politicians who are willing and able to attempt the proper education of our citizens on the long term problems our civilisation faces. Conservatives have shown no willingness to attempt that.