‘We can’t afford big government’

The Sunday Times, 19.6.16, Jennifer Sexton

GINA Rinehart has slammed politicians who don’t “have the guts” to reduce the ballooning cost of government.

The WA iron ore magnate questioned why India could cut red tape yet Australia could not.

Ms Rinehart said government spending was a massive issue overlooked so far in the federal election campaign.

She said the International Monetary Fund had found the level of government spending in Australia was growing at an alarming pace – the fastest among 17 comparable countries.

“There is one giant cost slab that isn’t decreasing: government,” she told News Corp in an exclusive interview.

The Hancock Prospecting executive chair, whose personal wealth is estimated to be about $6 billion, said the bloated and expanding size of government was behind the record government, debt.

“India has the guts to do what it’s doing to cut at least federal red tape, with the consequent immense benefits to its people, driving investment, jobs, economic growth and living standards. Why can’t Australia?” she said.

The comments are a rare foray into politics for Ms Rinehart, who insiders said felt personally burned by the public backlash when she rallied against the previous Labor government’s mining tax in 2010.

Yesterday she cited her own 20-year battle to develop the $10 billion Roy Hill iron ore project in the Pilbara as evidence of the weight of approval requirements that there were crushing business in Australia.

Not even former prime minister Paul Keating understood the extent of the burden, she said.

“Many politicians don’t even know how many state and federal approvals, permits and licences were required for a major project like Roy Hill,” she said.

“I asked a previous prime minister in the second half of last year how many he thought. His answer was ‘about 40′.”

The true figure for the preconstruction phase was 100 times that, with more permits, licences and approvals required in the construction phase, she said.

Ms Rinehart’s comments were yesterday echoed by other influential Australian business people.

Billionaire retailer Gerry Harvey said the amount of red tape seemed to increase every year because politicians were afraid spending cuts would draw the ire of the media.

“It doesn’t matter which party gets in, they all talk about cutting it and they all increase it,” the Harvey Norman chairman said.

Tony Shepherd, who chaired the federal government’s Commission of Audit said Australia was one of the most over-regulated economies in the world.

“We have far too many politicians, and we have three levels of government who seem to be in a competition to see who can write the most rules,” Mr Shepherd said.

Business Council of Australia chief executive Jennifer Westacott said obtaining approvals for big-scale construction projects could take years, discouraging foreign investment. “It is essential to cut red tape. It is strangling Australia’s competitiveness, it is bad for big business and it is a disaster for small business,” Ms Westacott said.

Ms Rinehart said cutting red tape would make a huge difference to small business.

“Please consider how Australia’s small businesses, our country’s largest employer group, are being affected as they too struggle with the same government red tape burdens as larger companies such as multinationals do,” she said.

“Australia must act more urgently to significantly cut the costs of doing business.

“We must do this in order to ensure that we stay competitive internationally, and/ or to stay in business, (which companies are striving to do), and protect the living standards that Australians enjoy today.”

Ms Rinehart heaped praise on the Prime Minister of India, Narendra Modi, for taking a knife to his country’s “notorious red tape”.

She said the policy was paying off, with Mr Modi presiding over a doubling in India’s economic growth in his first year in offic6.

“We should all ask ourselves: ‘What are we doing to point this out to our federal and state governments, even, media, in order to drive essential change?’ Very clearly, not enough,” she said.

“The Roy Hill Project provides a telling example of the negative burden of onerous, costly and time-consuming government red tape.

“All of the red tape accounts for enormous hours of additional work and added considerable costs.”