Lang Hancock, “Rex Connor: Is he the villain?,”
Sunday Independent, December 2, 1973, p. 28.
For 66 years, practically nobody outside of the trade union movement in Australia had heard of Rex Connor.
Probably few would have heard of him now except for the circumstances of his period in office coinciding with the tail end of the mineral boom, which pitchforked Australia on to the world scene with its export of major minerals, particularly iron, bauxite and nickel.
Because of the industrial world’s desire to draw materials from a stable source under reliable government, Australia was given the opportunity by the use of foreign private capital and expertise to achieve a dramatic growth of basic mineral exports.
The new Federal Government, in seeking popularity, mounted the emotional band-wagon of nationalism, making full use of the tools conveniently provided by its predecessor.
This thrust the Minister in charge of the Mineral Department, Mr Connor, into becoming a world figure.
In other words, he has had greatness thrust upon him, so that no matter how abrasive, how impractical or how trivial his remarks, his every word is analysed, reported and commented on in Japan, London and even New York.
This being so, he represents the greatest bonanza to the Australian news media since the advent of Mickey Mouse.
He has been hailed by the media as the arch enemy of the mineral industry and been held responsible for stabbing it in the back by implementing the following near death blows:
- Repeated disastrous revaluations of the Australian currency.
- The 25 per cent Reserve Bank’s retention of vital risk capital without interest.
- The threat by the environmental minister to use export licences to curtail mining to the satisfaction of the eco-nuts.
- Non-renewal of exploration licences.
- The freeze on “farm-ins.”
- The removal of the tax provisions relating to investors in mineral exploration.
- The removal of the partial exemption from income tax for certain minerals, and in particular, the removal of the exemption from income tax that previously applied to gold.
- The removal of the 20 per cent investment allowance so that mineral processing costs were increased and the working of higher grades made necessary to make deposits viable thus shortening the life of mines.
If one cares to glance at these near tragedies, it should be apparent that every one is outside the limits of his portfolio.
In other words, to have committed such errors he would need to have been the Governor of the Reserve Bank, the permanent head of the Treasury, the Minister for the Environment, the WA Minister for Mines, the Commissioner of Taxation, and Chief Lord of the Privy Council in Westminster.
In fact, he is none of these, but if he was, I hardly imagine he would knowingly decimate the very industry he is responsible for. If so, he would destroy his own department in the process.
Clearly then, Mr Connor is not the arch enemy of Australian mining. To find the true culprits it seems we have to dig a little deeper, both in substance and in time.
Let us return in time to the Menzies’ era, when under the camouflage of averting bank nationalisation, extraordinary powers were granted to the Reserve Bank. Today, these powers are unbelievably dictatorial.
The imposition of a 25 per cent non interest bearing deposit wit the Reserve Bank of risk capital for development and exploration is just a sample.
If the Government has been hoodwinked by the theorists into believing that a healthy overseas balance is harmful to Australia, why not lend our surplus to America (who would certainly appreciate it)?
Better still, why not remove all restrictive powers from the Reserve Bank so Australians can “buy back the farm” by freely investing in the overseas parent companies who have subsidiaries in Australia?
If the mining industry thinks it has been badly treated by Government-caused problems in the past, it should consider what is just around the corner with added powers proposed for the No 1 instrument of nationalisation — namely the McEwen Bank (or AIDC as it is now known).
The Government is now openly admitting it is a straight out instrument of nationalisation. In a parliamentary speech in October, Dr Cairns said the function of AIDC was to acquire ownership in Australian private companies on behalf of the Australian Government.
Socialist theorists seeking to satisfy their lust for power under the guise of benefiting Australia through nationalisation make the claims that:
- Private companies have sold minerals too cheaply.
- Private companies were remiss in writing such large contracts in American dollars.
- The Government is not getting its rightful share.
Surely, this tripe must represent the ultimate in bovine excreta? Let us look at the price question.
Our mining firms sold prodigious quantities of minerals very profitably in competition with the world at prices set by the world market.
They did not slash the price, but the Australian Government certainly did by carving 31 per cent off the Australian price with a series of ill-timed, ill-judged revaluations of Australian currency amounting to a total loss of about $850 million in WA iron ore contracts alone.
Mr Connor did not do this. On the contrary, he made the multi-nationals in charge of Australian production bid as a unit for the first time instead of being picked off one by one by the more astute Japanese.
Contracts were written in US dollars firstly because the buyers would not buy our minerals in any other currency.
Secondly, the whole world wanted US dollars so that it was a great plus for Australia at that time.
Thirdly, the then Government did not permit of the contracts being written in other than American dollars.
Let us turn to the claim that the Government is not getting enough “loot” from these giant undertakings to enable it to increase the rate of expansion of its departments.
As you know, in return for doing nothing (except getting in the road) the Australian Government gets 47.5 per cent of all company profits, royalties, tax from employees (both direct and indirect), from giant undertakings in the minerals industry.
Seeing that the Australian Government in total gets well over half the profits, the more gigantic the profits of the private companies, the wealthier the Government will be.
In such circumstances, it is only a muddle-headed impractical theorist who would suggest cutting both the Governments’ and the companies’ throats by sabotaging the companies’ profits.
Yet the Government says they are going to get more by risking taxpayers’ money participa[ting] directly in these industries, both in production and exploration.
In other words, even though bereft of expertise they imagine they are going to do better for the taxpayer than the private companies.
Australians should be thankful of the success of the Australian mining industry in getting ahead of such tremendous world competition.
Instead of playing havoc with Australia’s future in the mistaken belief that the Government is safeguarding it by freezing minerals in the ground, the Government should realise we are not militarily strong enough to persist with such a provocative attitude.
If we do, Mr Connor will soon find out that instead of the minerals belonging to the Australian Governments, as he claims, they will belong to the predator who gets here first with the mostest.
Therefore, in order to take advantage of the need for our minerals by powerful friends, the Government should reverse its present policy and carry out its pre-election platform promise of tax incentives, low interest development loans, nuclear power and provision of decentralised infrastructure.
There should be no need to point out that if the Government has any serious intention of paying anything other than lip service to the [word] “decentralisation,” the only hope is to foster mining, because ore deposits are not found in the big cities but in the outback.
So the development of viable orebodies is the only economic means of building up a decentralised population.