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In recent decades, these two states, huge in area but sparsely settled, have been growing at a faster annual percentage than the old and more populous leaders, New South Wales and Victoria. Admittedly, in the eyes of tourists, Sydney (NSW) remains the country's most exciting, bubbling city with more than four million people, but its annual rate of growth is much exceeded by Perth (WA) and Brisbane (Q). Likewise, in cargo handled, the big ports of WA and Queensland make Melbourne's and Sydney's docks seem puny. To fly along Australia's semi-deserted tropical coast and suddenly see a fleet of huge ships anchored and waiting to take on cargoes of iron ore or coal is to glimpse the huge economic stimulus to Australia's economy provided by China, India, South Korea, Japan and other nations. 

The recent federal election showed a deep ideological split between the two mineral-rich states and the other four. Labor won a large majority of seats in the four south-eastern, or older, states. It was trounced, however, in Queensland and Western Australia. There, Labor won only 11 seats; the Liberal-National coalition won 33. The policies of Labor, and especially the Greens, are clearly seen as less sympathetic to minerals. 

One segment of the recent swing against Labor did reflect a personal factor. Kevin Rudd was a Queenslander, and in the 2007 election he won swing seats in his home state with the support of voters who were proud that, for the first time since the First World War, they could directly elect a Queenslander as PM. Three years later, he showed he had forgotten their hopes. In his last gasp as Prime Minister, he announced — partly in the hope of reducing his government's rising debt — a huge tax on mining profits. There was no prior consultation with the leaders of the mining industry or of the relevant states. There had been no hint of such a tax in his previous speeches. He justified it with misleading statistics — presented to him by the federal Treasury — claiming that successful mines in Australia paid very low taxes. Rarely have senior officials of Australia's civil service seemed so incompetent. Rudd was probably entitled to complain — but did not — that he was undermined by his advisers. Mining is not popular among many urban Australians — especially teachers, journalists, civil servants and academics — and some of its unpopularity is understandable. But did it deserve to be the victim of a special tax simply because it was so successful? The principles underlying any tax imposed on economic success should, in theory, also apply to the winners in a variety of other Australian industries, especially the profitable banks which had received an enormous bonus — a financial guarantee — from the Rudd government during the global financial crisis. 

One argument against Rudd's proposed mining tax was logical. It would frighten away foreign investors from those new mineral projects that are gluttonous for capital. In the long term, the tax would lower all Australians' standard of living. This controversial episode had especially irked Western Australian and Queensland voters. It also increased the prestige of Tony Abbott — he instantly condemned the tax — and hastened Rudd's downfall as leader of his own party. After she supplanted Rudd, Gillard temporarily diluted the planned tax. But a version is still on the political agenda and now, following the election, the Greens are demanding that it be severe.

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Major Plonquer
November 27th, 2010
11:11 AM
Australia is doomed. Not by global warming but by global stupidity. Two years ago it rode out the recession largely on the back of China stockpiling mineral resources and investing into Australian mining infrastructure. Today I can't find a single Chinese company looking to invest further into Australia. The sheer self-destructiveness of the socialists in Canberra have ensured that Australia is rapidly becoming the new New Zealand. Thankfully, New Zealand is becoming the new Australia. But the big winner is Canada where Chinese attention - and dollars - is now turning. And Africa.

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