Lang Hancock on improving Japan-Australia relationship

HOLD UNTIL 2.00 PM E.S.T. APRIL, 18, 1978

Improving Japan-Australia relationship

It was claimed by officialdom that Australia would probably be importing iron ore by the year 1965, instead of which we are now supplying half of the Japanese market following on my discovery of the Hamersley Iron Field in November 1952.

In attempting to get capital interested to develop this major field I wrote on January 9, 1960 in the following terms to the head of what is now the parent company of Hamersley Iron:

This deposit looks bigger than the Lake Superior published reserves upon which the might of the world’s greatest industrial nation was built. Profit potential is quite probably in excess of say 1,000 million pounds sterling.

In May 1958 Prime Minister Menzies visited Wittenoom. In a speech of welcome stressing the need for development — despite the “knockers” who said, “Yes! but what are you going to develop?” — I said:

I am not backward in pointing out that the Pilbara area is one of the most highly mineralised areas in the world. We have large deposits of iron, as well as a host of other minerals.

Today, despite the knockers, we are the largest exporter of iron ore in the world.

In 1961 I was told by the so-called doyens of Australia’s mining industry, “Go away and find a deposit on the coast, there are no railways in the north-west and none can be built in such blackfellow country.”

In 1962 I was told they had condescended to undertake a study to build a 1.5-2 million ton per year railway in the Pilbara. I aid it needed a 10-20 million ton per year railway, to which they replied that I was an impractical dreamer. Today the biggest two railways in that region are each capable of carrying 40 million tons per year.

Why Brazil? — Not Australia
On August 20, 1972 I published an article headed “Why Brazil? Why Not Australia? Here’s Why”, which brings me to the point of my being here because the Japanese are making investments in the production of minerals throughout the world and developing those minerals in direct competition with Australia. For instance, in Brazil, Japanese investment is heavy in more than 50 different industries.

Sales contracts follow capital, and the development arising from the investment of capital and loans. In the eyes of the world’s bankers, who finance these big multi-national companies in their development projects, Brazil is the country they recommend.

When one asks leading bankers why their choice leads to Brazil instead of Australia, one is shocked to receive the answer that:

  1. The dictatorship government of Brazil offers them security of tenure, whereas Australia repudiates Fraser Island, Warkworth, Stockdale reserves.
  2. The men running the government are more practical than the people with whom they have had to deal in Canberra.
  3. The provision of infrastructure by the Brazilian Government in the form of railways, ports, etc, is in extreme contrast to the Australian Government, which takes more than half the profits in income tax and contributes nothing.
  4. Tax holidays whereas Australia threatens a resource tax.

With place such as Brazil, Malaysia, South Africa and South America, countries offering “tax holidays”, pioneer status and providing infrastructure, is it any wonder we have come to a dead stop in Australia as far as the development of our giant resources are concerned?

The main markets for Brazilian ore are Japan, West Germany and France. Two important contracts have recently been announced. Surely this last fact is significant? Australian ore is suffering cutbacks on existing contracts, yet Brazil is currently writing fresh ones.

Take heed
Now, in 1978, I am asking you to listen to me in the hope that you will help to break through to our government in Canberra and turn them to the path of free enterprise so that Australia can emerge from the stagnation that has enveloped it because of the disease of over-government.

I have often said governments do not create wealth, they consume it. Now, it seems they have diverted wealth from Australia to our competitors. One wonders, in the terms of “a modest member”, “how a well meaning government can be so stupid“. How can it kill the goose (mining) that lays the golden egg? Here’s how. Extra taxation burdens not imposed on normal business; on top of company tax, payroll tax and shire rates, the mining industry has to carry royalties, export levies and onerous bureaucratic restrictions such as export licensing.

Canberra misguided
So misguided has Canberra policy been, irrespective of the government in power, that the following unhealthy picture confronts us.

We’ve seen more cutbacks and closures in the Australian mining industry in the last 5 years than at any time since the depression.

We’ve seen gold mining decimated with the closure of Great Boulder, Hill 50, Lake View, North Kalgurlie and Mount Charlotte; base metal mines to close include Gunpowder, Kanmantoo, Carr-Boyd, Scotia, Mount Diamond, Mount Gunson and Mount Evelyn; mining for manganese and molybdenum has virtually eased on Fraser Island and Jurien Bay. The Warrego Smelter and the Bellambi coke plant have closed. As well as these closures we have seen cutbacks at Cobar, Tennant Creek, Kambalda, Aberfoyle and in the beach sand industry as well as the impending cuts in Australia’s major exporting industries, iron and coal.

Mind you, some of the blame can be placed on the mining industry’s leaders who, through weakness, let the government get away with murder. They needed a leader like “Joh” who is not afraid to stand up and be counted.

Australia not favoured nation
The result of Australian Governments’ diversion of much needed funds away from Australia has resulted in preventing the Japanese from regarding us in a “most favoured position”. It was to preach the message that we should get favoured treatment because of our behaviour to Japan that Deputy P.M. Anthony, Sir Charles Court and their retinues went to Japan seeking to maintain Australia’s present rate of iron and coal delivery at the expense of other nations.

Sir Charles Court says, “My mission is to see that cuts in imports from Western Australia are averted … and to get them to acknowledge the background and circumstances of Pilbara’s development and its special position in the supply of iron ore to Japan.”

Unfortunately Australia is no longer “the favoured nation”. It no longer has a special position.

One the contrary, because of Canberra’s actions, Australia has not been able to get a single major new coal or iron project under way.

What Australia now has is a large number of contracts who expiry dates over the next few years virtually coincide with Brazilian and Russian contracts coming on stream. The hard, unpalatable fact for Australia is that because of the Canberra attitude to Japan, it would appear that Brazil has contracts to deliver three times as much iron ore to Japan as Australia has in the mid 1980s.

Man of character
Of the political figures in Australia, the only one who seems to understand that the customer (Japan) must be given a preferred position in exchange for one for ourselves if we are to hold our economy together, is Mr Bjelke-Petersen, and yet he is constantly being denigrated by a section of the press — no doubt Canberra inspired. Fortunately the people in Queensland seem to have more sense and appreciate the results of having firm leadership in these troublesome times.

Australian dependence on Japan
Unfortunately Japan is not wholly dependent upon us to the extent that we are upon them. We are now more dependent on Japan than we ever were on Britain. We must therefore take steps to see that Canberra is made to realise just how vulnerable we are that it is vital to Australia’s very existence to have Japan treat us as the “most favoured nation” in the supply of raw resources to them. As I have said many times, if Japan sneezes, we get pneumonia.

I agree with Malcolm Fraser
I am heartily in agreement with Prime Minister Malcolm Fraser that his government should leave no stone unturned to cure inflation. I am heartily in agree with Malcolm Fraser when he says:

Irresponsible, massive government spending compounded by the irresponsibility of trade unions caused Australia’s unemployment.

I don’t altogether agree that inflation however is the number one enemy of Australia, serious as it may be, nor do I agree that the Fraser Government’s methods of curing it are sufficiently effective. I feel that the real enemies of Australia, in order of priority, are probably the environmental movement, Canberra, inflation and the communist controlled, dictatorially elected trade unions.

Civilisation or econuts
The world must choose between civilisation and the destructive environmental movement. We must choose between Canberra and Australia; on neither count can we have both. These alternatives, like death and taxes, are certainties, just as it is certain that without mining we cannot live because everything comes from the earth.

Australia-Japan
Regarding the Australian/Japanese relationship, it is essential that Canberra remove all impediments to the improvement of that relationship and I refer to the lock-out on Japanese capital, the threats of a resources tax, the variable deposit rule, high tariffs and quotas, super taxes or coal levies, the use of Australian ships, and things of this nature.

Japanese participation, capital-wise in any propositions, must be made welcome and they, as well as Australians, must be given absolute “security of tenure” right from the discovery through to the production stage. There must be no more Fraser Islands, there must be no more cancellation of Stockdale reserves or repudiation of coal reserves as occurred in N.S.W.; our international reputation among investors has already fallen to a status equal to that of the most despised banana republics of Africa. All of this must be unwound.

Praise profits
There must be no more hounding of any company that makes profits. The example of Utah which came in and mined areas which Australians despised and as a result made a record profit, must be advertised by the Australian Government and press throughout the world as a shining example of what risk capital can achieve in Australia and the opportunities that are open to risk capital with the blessing of the Australian Government. There must be no thought of ever mentioning such a thing (as they have been guilty of doing) that if a company (Australian or overseas) makes profits, Canberra will introduce a “Resources Tax” to take those profits from that company and so rob it of any bonus for efficiency.

Press can help
How can we get this message through to Malcolm Fraser, insulated from reality as he is by the cocoon of Canberra? I believe the press can help, which is why I accepted the invitation to be “guest speaker” at the I.P.I. in Canberra recently.

How does Canberra’s record compare with that of other nations? Despite a world depression we see thriving economies in Singapore, Taiwan and South Korea compared with our record of stagnation. We see huge Russian, Japanese investments and co-operation in the building of a 2,000 mile long railway into Siberia to obtain coal and iron at a cost of some $15 billion, whereas we in Australia will not build even 1,200 miles of railway to link the world’s largest iron ore region of the Pilbara to the giant coal resources of Queensland at a cost of something like $400 million, or two-thirds that of Canberra’s annual expenditure on the dole.

Coal-iron rail link
In our case the terrain is virtually flat over which a railway could be built at the rate of 1.5 miles per day for an expenditure of $150 million per year. The Russian Baikal-Amur Railway project is built in wasteland, the temperate 50 degree Fahrenheit below zero. On even chillier days the cold becomes literally audible, the moisture of exhaled breath freezes instantly and the colliding crystals make a rustling sound. The Jeep-like vehicles used by the construction crews have quilts on their hoods, at bridge construction sites the workers are busy cooking concrete in warm elevated shacks before pouring it into foundations. It traverses mountainous routes where there have been earthquakes and broad areas of permafrost, innumerable bogs where the ground heaves during the short summer thaw. Some 3,700 bridges and culverts must be built across rivers and streams. There are numerous tunnels through 7 mountain ranges, one of them 9.5 miles long. The natural hazards include swarms of mosquitos and nats in summer and frostbite and conjunctivitis caused by the glare of the sun on snow in winter. Food must be flow in, mail service is irregular.

Despite all these difficulties, this project is about one-third completed as a result of inducements to the Japanese. We who have more to offer the Japanese than the Russians could surely make an inducement which would enable them (if we don’t do it ourselves) to build a railway linking Australia’s two richest regions.

Mine uranium without delay
One area (if we don’t waste any more time) where we can exert strong influence on the Japanese to regard us as the most favoured nation would be to promise them a continuous and unlimited no-strings-attached supply of uranium. Like Australia, they have no oil, but unlike Australia they have a full realisation of the horrors of the coming energy crisis and unlike Australia they are going nuclear.

It should be well and truly understood that Australia, according to the world’s leading nuclear authority, Dr Teller, has no more than 20-30 years in which to turn its vast uranium resources into cash. Other experts whose opinions are comprised in Mr Justice Parker’s report on the Windscale project, say Australia has 10 years in which to make good profits from uranium, after which Windscale will begin recycling enriched uranium and plutonium for Britain’s nuclear energy industry, and for other Australian uranium customers, most importantly Japan and West Germany.

The Windscale plant will help Britain and Japan to develop major fast-breeder reactor programmes, which will reduce the demand for uranium still further.

I have repeatedly said that I would be happy to beat the Shah of Iran to the punch and have this radioactive waste material stored in my backyard because of the enormous value it will be to Australia in years to come.

Malcolm Fraser must therefore be persuaded to shed his present list of advisers, (under whose guidance he has adopted the unscientific Whitlam-instigated Fox Report) and make certain that his bureaucrats and the communist-controlled unions are swept aside so as to allow Australia to take its rightful place in coming nuclear age.

In view of nuclear power’s enviable record, which is a record of some 3,000 years of accumulated safe operations, as far as the public is concerned, no government can be regarded as responsible or even sane, that permits itself and the public to be brainwashed into believing completely unsubstantiated horror stories of imagined dangers of nuclear power and therefore not adopting it promptly.

Since this avalanche is propaganda started to be unleashed on the unsuspecting public, 1,000 million people have died from causes other than nuclear; yet not one member of the public has been killed by the generation of nuclear power. Surely this makes a mockery of the ecologists’ claim that they have a regard for human life.

Press responsibility
We are facing an energy crisis too horrible to contemplate. It will bring more suffering to mankind than cancer, asbestosis, or even nuclear warfare, so surely, it is about time the government, the environmentalists and the media generally examined their consciences in this matter and had some regard for the amount of human suffering that they are helping to bring to humanity by promoting such monumental untruths about the safest, cleanest and cheapest power that is available to the human race.

The I.P.I. keeps pressing for the freedom and rights of the press; nothing is said about shouldering any responsibility. Surely the press must have a responsibility to make available to our future citisens the true facts about nuclear power. If they have no knowledge of it themselves, let me recommend a book written in simple language by a simple man, printed out of the goodness of his heart with simple tools in his own home. The Health Hazards of NOT Going Nuclear, by Petr Beckmann.

It should be a standard text book in all Australian schools.

Excess energy consumption
Not satisfied with the policy which keeps our uranium in the ground and which virtually prohibits the further discovery of oil in Australia, Canberra is now proposing that we use up what small resources of energy we do have by launching out on a large scale secondary processing gambit without our shores. Apparently Canberra is not aware that if all the bauxite that leaves Australia today was smeltered into metal without our country, we would exhaust our total known oil reserves in some 15 months. Surely we should move in the opposite direction.

Think what saving it would be to Australia if our Holden motor car for instance was made under licence in Japan and shipped back to Australia at something like a 30% reduction in price. Such an arrangement would probably save the threatened cutback to our coal and iron ore industries if an outcome of the negotiation was that Japan manufactured these Holdens and certain other products which they could manufacture and supply to us cheaper with lower tariffs than if we did it ourselves, from 100% Westralian iron in a factory powered with 100% Queensland coal.

Aboriginals to suffer
With regard to the mining of uranium and the mining of bauxite in Australia, unless there is a complete reversal in the present policy of Canberra, the aboriginal will be the one who will suffer in the long run.

In the Aurukun issue it is not the welfare of the blackfellow or the mining of bauxite that is at stake. The terms for the mining of bauxite in relation to the blackfellow were set out years ago. What is at stake is another example of the ever growing central bureaucratic socialist dead hand power of Canberra, usurping the power of the federated states. At this point it would pay to ask just who is going to benefit by a transfer of control to Canberra? Which department is going to grow bigger? Who is going to handle increased funds? And so on. You can bet your bottom dollar the last person to benefit will be the natives of Aurukun.

Of the grand total of $161 million allocated in the 1974-75 budget to aboriginal welfare, only $9 million went in grants to aborigines. $31 million went in so-called aboriginal welfare services. $17 million in aboriginal “education services”. $5 million for aboriginal health services. $3 million for community development, whatever that means. And no less than $32 million for business ventures supposed to be of benefit to aborigines.

Total outlays on aboriginal affairs rose nearly threefold in two years of Labor government and are still expanding. The Department of Aboriginal Affairs doubled to 1,450 staff, but actual payments to aboriginals increased relatively modestly from $5 million to $9 million, to a level of $80 per aborigine, or about $400 per family. But if the whole of the budget for Aboriginal Affairs ($160 million) had been simply paid to aborigines, they would have got $1,500 each, man, woman and child. The average aboriginal family would be above the average white family’s earnings in Australia without any of them having to lift a finger. The fact that aborigines are not the richest people in Australia is a measure of the extent to which the money supposedly spent on their behalf is drawn off into administration, research of doubtful value and so-called services.

Even the administration realised how incompetent it was (and is). This report is actually by the Department of Aboriginal Affairs:

There was a good cause for concern by August 1973 over the department’s inability to cope fully with its administrative obligations … the secretary took the unprecedented step of calling on the Auditor-General in September to tell him that he could no longer adequately control the financial operations of his department.

But instead of being given the shove the department got more staff and more money as the reward for incompetence.

As far as the aborigine is concerned, his undoing was brought about by foolhardy moves to Europeanise him. He was given so-called “citizen’s rights” which in his case amounted to fornication and drinking rights, and the right to pay taxes. If he is to be Europeanised, he must be given the same responsibilities and rights as the European population of Australia, but no extra privileges, because if he is to be made a privileged minority (which he is fact becoming), then unscrupulous people will use him to gain those privileges for themselves.

This is what is happening by granting mineral rights to aborigines without them having the responsibility to discover the minerals for themselves. (If they do discover minerals, they, in common with other Australians, should be granted first rights — but not otherwise.) Granting of mineral rights without having to first discover them has the effect of people (whilst purporting to help the aboriginal) really seeking to help themselves. They hope to obtain from the aborigine his rights to minerals cheaply by the trading of whisky, etc. This is particularly so in the case of uranium mining.

Seeing that we have only 20 years in which to turn our uranium into cash and 20 years for the aboriginal to get his hands on large sums of royalty money etc., it would seem to me to be nothing more than self-destructive programme of 20 years duration for the total ruination of the few blackfellows that live adjacent to uranium fields.

I wish to conclude by saying that I do not hold any uranium leases, nor do I intend to trade any rights from the aborigines. I was brought up with only aborigines for playmates and believe that if you want to help them the best thing is to leave them alone and not enforce upon them the so-called benefits of western education.

There are too many people, as Mr Killoran said, anxious to force upon aboriginals “political, social or economic solutions to what non-aboriginals regard as their problems.”

Just what benefits the church hopes to confer on them is beyond my comprehension, seeing that the aborigines already have a more Christian-like religion or customs of their own.

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