Wednesday, March 16, 2011

Take a leaf out of S'pore story: Aussie magnate

Mar 16, 2011

She joins call for govt to follow policies that make Singapore a success
By Jonathan Pearlman

SYDNEY: Australia's richest person, mining magnate Gina Rinehart, has joined a list of prominent Australians calling for the country to look to Singapore as a model of success.

Ms Rinehart, whose wealth is estimated at between A$9 billion and A$12 billion (S$11.6 billion and S$15.4 billion), said Australian debt and taxation are too high and the country has failed to make the most of its mining boom.

In an article for the Australian Resources and Investment magazine, Ms Rinehart said Canberra should copy Singapore's approach to foreign workers, cutting down on red tape, lowering taxes and encouraging foreign investment.

'With good, responsible government, less tax, policies to welcome investment, and less red tape, Australia could be in Singapore's position over time,' she said.

She continued: 'Singapore welcomes investment, makes a real effort to minimise red tape (even by asking its people and businesses to point out time- or money-wasting red tape if they find it), has low taxes, has low crime, enables guest labour, and has no debt... Despite the country's small size, low population and lack of resources and local water supply, Singaporeans benefit significantly from its policies... Australia is the complete opposite, despite wealth generated from vast resources.'

Ms Rinehart inherited her iron ore mining business, Hancock Prospecting, from her father Lang Hancock, who died in 1992. She has since expanded the company, which was saddled with debt, and steadily risen up the ranks of Australia's wealthiest people.

She was second in last year's annual Australian rich list by Business Review Weekly magazine and recently topped Forbes magazine's list of the country's richest 40 people. She is also the second-richest woman in Asia, after Indian steel magnate Savitri Jindal.

Ms Rinehart's article follows recent calls by Aboriginal leader Noel Pearson for Australia to emulate Singapore's record in helping poor communities out of poverty.

Another businessman, Mr Peter Holmes a Court, recently named Singapore - along with New York, London and Amsterdam - as a model for promoting Sydney's global image.

While the praise from Ms Rinehart and Mr Pearson was unrelated, both stemmed from concerns over the need to promote development in Australia and pursue further economic reform. These concerns are common, particularly among economic conservatives, who have long argued that Australian governments are heavily bureaucratic and too dependent on tax revenue.

In global terms, Australia's economy has become increasingly open and competitive. In the past 20 years, the country has continually lowered tariffs, cut welfare spending and dependency, and reduced regulation.

According to the Heritage Foundation, a conservative think-tank in the United States, Australia has the third-least regulated economy in the world, behind Hong Kong and Singapore.

But taxes remain high, especially for companies and high-income earners. Tax rates in Australia are far higher than those in other places in the region such as Singapore and Hong Kong.

Ms Rinehart listed various ways that the government could emulate 'Singapore's fortunate and compelling position'.

'Australia needs guest labour,' she said. 'This should be considered on humanitarian grounds alone. Please consider the terrible plight of very poor people in our neighbouring countries in Asia... Skilled guest labourers are also badly needed in Australia. Media reports mention almost daily that major projects are being delayed due to lack of skilled labour and long delays in processing guest labour visas.'

Ms Rinehart's article was carried on the Sydney Morning Herald's website, and drew criticism as self-serving. Said one reader: 'All she wants is to be able to make more money and pay less taxes, and to continue to have her net worth skyrocket.'

However, the proposal to bring in more guest workers was supported by 57 per cent of almost 7,000 readers in an online poll conducted by the Herald's website. The government has been considering an unskilled guest worker programme, especially aimed at bringing in Pacific Islanders to fill labour shortages.

Australia's plans to introduce resource and carbon taxes also drew strong criticism from Ms Rinehart, who said they would reduce competitiveness and hurt exports.

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