Trigger warning:

This site may, in fact always will contain images and information likely to cause consternation, conniptions, distress, along with moderate to severe bedwetting among statists, wimps, wusses, politicians, lefties, green fascists, and creatures of the state who can't bear the thought of anything that disagrees with their jaded view of the world.

Mar 24, 2012

Labor keeps adding to sovereign risk.

One of the most important aspects to investing anywhere is the spectre of sovereign risk; the possibility that the state will carry out some action that will cause serious damage to your investment, or possibly make it unviable. Here in Australia, this has become a real possibility especially since Labor has come to power. Some actions that have disturbed investors are:

  •  The carbon tax. 
  •  The mining tax. 
  • The nationalisation of telecommunications with the NBN. 
  • The overnight announcement of a ban on live cattle exports, destroying our reputation as a reliable supplier. 
  • The government being under control of the Greens who are economically illiterate and have an authoritarian agenda to destroy whole industries at the stroke of a pen. 

Recently it was revealed that green groups led by Greenpeace were in the process of building up a $6 million war chest which was to be used to disrupt and delay new coal mines via legal action and other ploys in order to make them unviable. Australia relies heavily on this industry along with iron ore in order to keeping the money rolling in.

Since then it has come to light that three of the organizations involved have received about three quarters of a million dollars from the Department of Climate Change. While this funding from the federal government is not related to their attempts at closing one of our most important industries, the availability of these funds for other purposes allows them to use their own funds to damage the economy:
 The Nature Conservation Council (NSW), Environment Victoria and the Conservation Council of Western Australia have received grants of $211,000, $213,215 and $319,420 respectively for public climate change activities since last December. News of the funding has prompted outrage.  
"We were quite shocked to learn about the detailed strategy to systematically disrupt and delay the Australian coal industry, particularly major export infrastructure," Australian Coal Association chief executive Nikki Williams said. "Now we learn that some of the anti-coal groups involved might potentially be misusing public funds to damage the coal industry, the jobs it provides and the Australian economy as a whole.” 
Adding insult to injury, Rio Tinto has just had approval for a $1.5 billion mine revoked because of a factually inaccurate one page submission from the Wilderness Society:
 Federal Environment Minister Tony Burke yesterday revoked an earlier decision to approve the project proposed for south of the Embley River near Weipa on Cape York, and declared he would force the miner to consider the impact of its massive project on the Great Barrier Reef - sparking Rio to warn of a significant impact on 3000 jobs in Gladstone at a time when the manufacturing sector was already under pressure. 
Environment groups had urged Mr Burke to revoke the decision, saying there would be a significant increase in shipping through the reef that could see up to 700 ships yearly - or 14 a week - transporting bauxite from the mine, with two alumina refineries in Gladstone a key destination for the ships. 
But Rio Tinto Alcan's boss of bauxite and alumina, Pat Fiore, said there would be "very little" change to shipping traffic through the reef from Weipa to Gladstone. "The vast majority of any extra shipping from the South of Embley project will be travelling north to export markets in Asia - not through the Great Barrier Reef," he said. 
Yesterday's decision sent shockwaves through the mining industry, with the Minerals Council of Australia saying it was "deeply concerned that a multi-billion project can be put at risk with an unsubstantiated one-page complaint from a green group." 
This really makes you wonder why anyone with an ounce of common sense would invest in the place at all.

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