Simon Pound is a reporter for Media7 the TVNZ7 media show, He also writes a bit for George FM's favourite REMIX magazine.
Every week he gets out and about to the most interesting media happenings all over the place. The more colourful the better.
On Wednesdays at around 8.30 he joins Nick D to talk about the amazing people and things he chases around. Tune in & check it out!

24 March 2010

First up, I'm not against mining.

I can see the point of mining. I think that it makes a lot of sense to try to explore and exploit the possibilities of our Country if we want to have a wealthy and successful place.

I think that if we are going to use resources it makes more sense to have them ethically mined here, subject to our exacting environmental and labour/employment standards as opposed to using materials that we import and god knows how horribly they are extracted and how horribly the workers are treated.

I must admit I had a tinge of excitement when thinking about mining in NZ. It is the kind of thing that could help us continue to pay for our world class health and education. It could create an economy that might sustain wages so every ambitious kid wouldn't leave NZ and we wouldn't just be left with hippies and bums and other conservatives who want to live in a static, arrested world. I reckon that if we don't try and go forward then our standard of living will go backwards. People who talk about sustainability often miss the fact that we are already slipping so by definition things are not being sustained as it is.

But all this said, I have to say I disagree extraordinarily with the National Government plans for mining. How can they take gold and turn it to shit so regularly? I'm still reeling from their decision not to levy a land tax and am starting to think they may have brown fingers for surely everything they touch turns to shit.

This could have been an enormous opportunity for the country if it was managed in the right way.

Overseas the exploitation of mineral wealth has been used to benefit the countries that are losing it. In Norway they set up a fund that uses the wealth to make investments for the country in order to set up their economy to sustain a time when the wealth runs out. Iran, Venezuela and that communist hotbed Alaska all use mineral wealth to directly help citizens. Alaska pays a dividend every year to citizens and has no income tax. Iran and Venezuela subsidize energy costs at home and channel profits into public services. Alberta in Canada have a heritage fund… The list goes on and as you can see it isn't just lefties -- -Alaska is the home of Sarah Palin remember.

There are many ways that the shared assets of mineral wealth to be found in a country can be extracted and the country that loses them and perhaps the recreation or natural values of them can be compensated and improved.

Let's look at what National is proposing. They are offering to mine in high conservation areas that are used by many NZers for recreation. Places like the Coromandel and Great Barrier. They are also proposing to mine in areas that have Kiwi population and ancient Native trees.

What do they offer in return? -- a conservation fund of up to ten million a year for four years -- -and the swapping in to protected lands of 12000Ha that it appears was already going to be protected anyway. They say that the amounts they can get from these areas are in the high billions. 10s of billions of potential wealth to be extracted and in return we get 40 million, some jobs and extra economic activity to add to the tax base. In return the vast majority of profits will go overseas and no provisions will be made to make this resource work for all New Zealanders -- and no planning will go into some kind of replacement plan to make sure the country will be able to mop up after the minerals are gone and have a resilient economy.

This beggars belief. John Key used to work for one of the world's biggest financial institutions. He understands the idea of managed funds. He understands that economies would be distorted by pure extraction with no plan b. Where is his vision? What are they offering us -- -despoiled shared resources and landscapes for no shared benefit and no plan b? Unbelievable.

Let's look at what happens when a country takes this approach. There is a country called Nauru.

They had vast stocks of phosphate in the form of Guano -- bird shit. NZ, Australia and Britain mined it all. Problem was their Islands were made of the stuff.

In the 60s and 70s Nauru had the highest per capita income in the world. But if you look at pictures today of Nauru you can see what happened. It ran out because they ran out of island to plunder. They actually mined 63% of the whole place. Removed more than half the country!

Nauru went from one of the highest to one of the lowest incomes as their planning hadn't worked -- their wealth had gone to NZ, Australia and Britain. They tried to be a tax haven and sell passports as all they knew to do was exploit rather than make, but that didn't work. In a sad twist the countries that benefited paid an enormous settlement to Nauru to compensate them for ruining their country that Nauru then squandered on bad investments and making a small clique rich. Most recently they have been making money from housing asylum seekers for Australia.The problem was no culture apart from exploiting was fostered.

And you know what the worst thing is -- Nauru did have a fund in place. They had a fund that was at one time worth more than 1 billion. And they lost it all by truly stupid international investments. They didn't build a local economy. They expected just to be able to exploit resources. They then lost the settlement. Imagine what happens here without a fund.

And now National want to do just that. They are promising jobs and short term income. Just like Nauru.

I don't know -- i have flown to Christchurch and looked out at the Southern Alps as mountain after mountain went by and thought I'd swap a bit of that for some wealth in the country. We talk about catching up with Oz -- well -- -that will take mining, plain and simple. We haven't enough room to do it with cows or enough money to do it with R & D. Unless we mine to make the Research and development happen.

I'd be for mining, in principle, if there was such a plan in place. But I can't believe that National are offering us the worst of all deals.

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