A striking feature of the age of billionaires in which we now live is that billionaires are more and more inclined to give us the benefit of their opinions. In the past year alone, we’ve had Marc Andreessen’s retro-futurist “Techno-optimist manifesto”, Mark Zuckerberg’s pronouncements on the future of media, and, most recently, a cosy chat between Elon Musk and Donald Trump (whose billionaire status is often touted but remains questionable). In most cases, the main effect has been to demonstrate that, however good they are at making money, billionaires are no smarter than the rest of us when it comes to politics or the ordinary business of life.
Australia’s richest billionaire by far is Gina Rinehart, who has massively multiplied the already substantial fortune she inherited from her father, the late Lang Hancock (Rinehart claims she inherited more debts than assets). Like Hancock, who spent decades on the rightwing fringe of Australian politics, Rinehart has never been shy about expressing her opinions.
A look at those opinions suggests that, taken as a whole, they would pass the “pub test”, in that they are about as sophisticated and intellectually consistent as you might expect to hear in the evening at a public bar. In common with many opinionators, Rinehart disdains the constraints of arithmetic, simultaneously demanding lower taxes, more public spending and lower deficits, all to be paid for by eliminating unspecified waste, fraud and duplication.
A recent piece in the Daily Telegraph, published as part of a News Corp “Bush summit” series, illustrates this point. Hancock begins with a familiar litany of woes about the high costs faced by farmers and the burden of (unspecified) red tape, forcing them off the land. This part of her article could have been (and has been) written any time in the past 50 years or more.
No one reading this sad tale would be aware that farm incomes have been at record highs last year, an outcome reflected in strongly increased land prices. The executive director of the Australian Bureau of Agricultural and Resource Economics and Sciences, noted at the time: “When you look at the cropping sector in particular, average farm incomes are about 75% above the 10-year average – about $665,000 – up slightly from last year.”
Farming is a risky business and these outcomes depended in part on a string of good seasons that came to an end this year, with farm incomes now back to where they were three years ago. But a rebound seems likely, making Rinehart’s gloomy pronouncements seem overstated, to say the least.
Turning to remedies, Rinehart wants a string of tax reductions, including the abolition of payroll tax and stamp duties along with reductions in excise tax on fuel. A striking feature of this wishlist is that most of the benefits would go to city dwellers. Few farm businesses are large enough to reach the threshold for payroll tax. Family-owned farm businesses are exempt from stamp duty on intra-family transfers, while city dwellers routinely pay tens of thousands of dollars as a cost of moving house. Finally, no excise tax is paid for on-farm (or mining) use of fuel.
These proposals aren’t matched by a willingness to accept reduced public services. After acknowledging the need for “nurses, police, hospitals, health care, our increasing numbers of elderly, emergency services and veterans (And much more)”, Rinehart goes on to demand a massive increase in provision of these services to rural areas, saying that “the Pilbara in Western Australia should have some of the best hospitals and infrastructure in the world, plus some of the best playgrounds and sports facilities”.
Some areas of public expenditure didn’t make it on to her list, but Rinehart has covered many of them elsewhere. She has been a keen proponent of publicly subsidised dams, relaxing means tests on pensions and more spending on defence (apparently to be financed by selling off the defence department’s “pot plants, paintings and sculptures”).
The closest Rinehart comes to suggesting a cut in public expenditure is a nebulous reference to handouts of “another $500m here, another $500m there”, most of which is apparently spent within the Canberra bureaucracy. Doing away with these would supposedly cover the tens of billions of dollars of reduced revenue and higher spending implied by her lengthy wish list.
And, of course, all of this is to be achieved while cutting debt and deficits, lest we share the fate of Sri Lanka and Argentina.
There’s nothing particularly unusual about Rinehart’s grab-bag of opinions. You can hear similar thoughts in any public bar (or, with minor variations, any inner-city coffee shop). But as a contribution to discussion of public policy, they are best left there.
John Quiggin is a professor at the University of Queensland’s school of economics
