Rio Tinto Chairman says resource boom made Australia “bad and lazy”

Jan du Plessis, Chairman of global mining giant Rio Tinto, says the resources boom in the country has resulted in “bad and lazy” habits, reports The Australian.

Jan du Plessis, Chairman of Rio Tinto Image credit: flickr.com User: The Department for Culture, Media and Sport
Jan du Plessis, Chairman of Rio Tinto
Image credit: flickr.com User: The Department for Culture, Media and Sport

According to him, this has masked the weakness of a slowdown in productivity improvements.

“Australia now needs to rebuild competitiveness and productivity,” he said.

Mr. du Plessis spoke at the Australian British Chamber of Commerce business lunch in Sydney last Friday. He criticized the way the former Labor government approached its relationship with the mining industry.

According to him, the Resource Super Profits Tax proposal was especially unfortunate, and he described the process as questionable.

“There was almost no discussion. A more considered approach would have endeavored to introduce reforms that encourage investment, generate economic growth and create jobs for Australia.”

“We have to re-earn and re-build the trust that was lost and that we so desperately need,” added Mr. du Plessis.

Mr. du Plessis added that the golden era of wealth creation (between 1991 and 2009) which made Australia’s economy “the envy of many in the world”, is long gone and after the global financial crisis, the government and business need to take stock.

“For too long, government and business have taken prosperity for granted. We have developed bad and lazy habits. The strength of the resources boom has masked the weakness of a slowdown in productivity improvements.” he said.

Mr. du Plessis further added that cooperation and collaboration of business and government at an industry and company, federal and state level are a must for effective reform in Australia.

Rio Tinto was mentioned as Australia’s largest corporate taxpayer, outlaying $US8 billion in corporate tax and royalties during 2012.

“The economic hardship still being experienced in countries on the periphery of the Eurozone, especially in southern Europe, must not be underestimated,” he added.

“Although the political and administrative processes in Washington continue to be gridlocked, corporate America seems to have shrugged it all off and is clearly making good progress.”

According to him, the global economy’s wellbeing depends on Asia, particularly China, where gross domestic product grew 7.8% between July and September.

“My long-term view of the Chinese economy remains positive and we expect to see continued, robust growth in demand for commodities. This is good for those of us in the mining business and therefore good for Australia,” concluded Mr. du Plessis.

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