Mining sector is no ATM, tycoon warns

SYDNEY: Australia's richest person Gina Rinehart yesterday
accused the government of using the mining industry as an ATM, warning
of an unhealthy reliance on the sector and unsustainable debt levels.

In a speech to the Australian Mines and Metals Association conference,
the outspoken tycoon, chairman of Hancock Prospecting, cautioned that
without reform Australia risked the debt problems faced by countries
like Greece.

"Let's not be too proud to admit that we're really just a large island with a small population with record debt," she said.

Australia's economy has been driven by the mining industry but the boom
is approaching an investment peak and a bumpy transformation lies ahead
as alternative sources of growth are sought.


Mining projects have faced headwinds from depressed
conditions in Europe and the United States, softening growth in China
and increased competition from other producers as well as falling
commodity prices.

Earlier this week, the government revealed a significant plunge in
revenue due to sluggish corporate tax earnings and announced an A$18
billion (RM52.9 billion) budget deficit for 2013/2014.

Rinehart, a fierce critic of the government's mining and carbon taxes,
said it had been complacent in managing the commodities boom and its
debt levels were unsustainable.

Meanwhile, Prime Minister Julia Gillard called the claims "absolute nonsense".

"(It's) not backed by economists and not backed by ratings agencies
with their triple-A rating of the Australian economy," she said.

"What we are doing is taxing super profits in the mining industry
because it's Australians that own the mineral wealth in our ground and
no one individual." AFP