Comment: Gold, Gold, Gold for Australia – in Virtue Signalling

 

 

 

Australian netballer Donnell Wallam doesn’t like Hancock Mining because its deceased founder made vile racist statements 38 years ago. Her team mates stood by her rather than question the modern relevance and significance of her concerns. Hancock Mining withdrew their $15M in sponsorship over four years at a time when Australian netball could least afford it. The sport is already $7M in debt and replacement sponsors of this size don’t grow on trees.

 

Australian cricket captain Pat Cummins has climate concerns and doesn’t like Cricket Australia’s platinum sponsor Alinta Energy that uses team members in ads. Cricket Australia have dropped its $40M four year sponsorship deal with Alinta.

 

Some high-profile Fremantle Dockers supporters led by ex-Premier Carmen Lawrence and ex-player Dale Kickett have called for the club to drop its major sponsor deal with Woodside Energy. To date the club has stood firm on its $2M per annum sponsorship contract.

 

Rugby Union star turned Senator David Pocock has supported all of these initiatives – simplistically likening energy industries to tobacco products – that should be banned for their harmful properties. Tobacco use is discretionary. Energy use is not, if modern living standards are to be sustained.

 

My sense is that player power has aligned with cancel culture and that much of the concern is either wrong-headed or disproportionate. Here’s a summary of my reasons:

 

Climate Change needs concrete transition plans and hydrocarbons have a long term (although diminishing future). Serious people in Australia (and most developed countries) don’t doubt man-made climate change, and the political debate is largely settled (outside the energy self-sufficient US). Green activism has resulted in greenhouse emission reduction targets, but the real question now is how to achieve them without destructive costs and living standards reductions that destroy the support base. We pat ourselves on the back and point to rooftop solar, but have not had a serious discussion of the cost and timescale of infrastructure investment to deliver reliable base green energy for industry. Energy companies have powered our homes and jobs and underpinned our living standards for decades. Fortescue Mining are making major investments in Green Hydrogen as a coal replacement in steel production. Channeling industry and technology is the way to tackle climate change without reducing living standards – not demonising them.

 

Australia’s Living Standards and Position in the World result from our Mining and Agriculture exports.  We are 26 million (0.33%) of the world’s 8 billion population, sitting on 6% of the world’s natural resources. The things we dig up and grow to export let us buy technology and living standards from resource deficient countries. Australia has the wind, solar and land resources to power green energy and process more of our minerals onshore. Currently we mine lithium in WA to ship to China for the energy intensive refining (with Australian coal) to sell back to us in battery technology. With infrastructure investment we can turn that around. But much of the world lacks the reliable wind and sun to make a green transition. Germany turned off its nuclear power stations to marginalise the Green party and is now turning back to coal or shifting manufacturing industry offshore in the wake of the Russian oil and gas embargoes. Australia has choices most of the world doesn’t. Lastly petrochemicals – oil and gas as the base material for plastics, coolants, lubricants, fertilisers, pesticides etc  – is 20% of its use and will survive long after we’ve (thankfully) stopped burning it in engines.

 

Mineral Wealth is geopolitical security. All wars are economic wars fought over resource security. Think Ukraine and potentially Taiwan. If we aren’t commercially developing and exporting resources that less fortunate countries need to survive and grow they will be taken from us.

 

Development is Opportunity. “Behind every great fortune is an equally great crime” Balzac and used by Mario Puzo as preface to The Godfather. The history of the world is conquest and empire. Economic power leveraged militarily to grow and capture more resources until empires crumble under the weight of internal entitlement and excess. We need to recognise the crimes of colonisation, while also accepting this would be a subsistence desert country without the science and education it brought. Racism and cultural exceptionalism ripples through history. English and Irish. Yellow peril. Red hordes. Catholic and Protestant. Crusaders and Muslims. The way beyond these divides is to harness differences for mutual advancement. Mining has 4% indigenous employment – double the rate of industry generally. Indigenous employment targets in new mining projects and skills training yield lasting benefits in a way that royalty payments have not.

 

Who chooses – Pluralism and Vetoes? Imagine a team of Australian sporting greats. All those great left wingers equally matched on the right wing with a confused group of midfielders and coaches trying to get the team kicking in the same direction. Choices have consequences – for other team members and for other teams within the same league. Even individual sportsmen generally compete within a league that has corporate sponsors. Think golf, tennis and the Olympics. How does a sport or a team rationalise the competing views of a pro-development advocate with a radical environmentalist? Each have valid points to make. Which team mate do you “stand by”?

 

Not all sports are equal. In Australia only AFL, NRL and cricket provide a secure high income to top professionals. A few high profile individuals might command it in individual sports like golf, tennis and cycling.  Only a handful of women are in that category.  It’s not fair, but it reflects our market-based economy.  Women in non-market countries fare much worse (think Russia, China and the Middle East).  Without strong viewer numbers to drive sponsorship it is a slow grind upwards for women’s sport in a crowded marketplace. Their decisions have bigger consequences for income and life choices than in male elite sports.

 

Where to Draw the Line? Climate change; racism; gender equality; obesity; gambling; drugs and alcohol; social media influence – all important topics for community debate and political decisions. High profile, single issue advocates like a Greta Thunberg play an important role in raising issues many would prefer to ignore. “Progress depends on the unreasonable person”. Balancing multiple perspectives is the role of politics in a democracy. “The worst system of government, except for all the others,” as Churchill remarked.

 

My perspective is that we should all be informed and advocate for what we believe. But banning people, companies or activities should be avoided except where there is definitive harm for little useful return. To do otherwise is to invite consequences as harmful as those you are seeking to prevent. In my view none of the three cases in public debate in Australia currently come anywhere near meeting that bar.

 

More broadly in a world of enormous complexity – social media and celebrity cultures reduces people and issues to binary good and bad. Black and white. Cancel culture. Get rid of the baddies  (polluters, racists, sexists, corporate exploiters etc etc) and all will be well in the world.

 

Unfortunately people and things are rarely that simplistic. We exist on a continuum of positive and negative qualities where different people put different value weightings on each aspect. The balance between liberty and regulation; taxes and choice; income and exploitation; security and freedom. “We have to learn to live with the consequences of the things we can’t afford to live without”.

 

 

 

Further Reading and Sources:

 

• Peter Zeihan is a US development economist and demographer. His book The End of the World is Just the Beginning is highly recommended. He is a climate change believer but describes the economic history of how societies rise and fall and the current world through a powerful lens of geopolitics; transport; energy; finance; resources; manufacturing and agriculture. For those who don’t want to read a large book I first heard him on the Top Traders Unplugged podcast. Their Ideas Lab and Global Macro series of one hour interviews on that forum have consistently interesting guests and thoughtful questioners. The world as it is – rather than how we would wish it to be. Their Investor series is more specialised around why our savings and superannuation are evaporating in the face of endemic inflation!

 

• A brief recent Australian article along similar lines. https://indaily.com.au/news/business/2022/04/04/the-stats-guy-australias-trade-economy-in-a-time-of-turmoil/

 

• Economist and climate advocate Ross Garnaut’s Post Dinner Speech at the Jobs Summit. The most thoughtful, incisive and under-reported public policy analysis of recent years. Looking forward to invest in what we need, not backward to console ourselves. https://cpb-ap-se2.wpmucdn.com/blogs.unimelb.edu.au/dist/a/142/files/2022/09/SUMMIT-SPEECH-1-SEPTEMBER-2022.pdf

 

• UK golfer Meghan MacLaren is the best current writer I know from inside the bubble of professional sport. Insightful, generous and hard headed about the privileges and challenges of being a middle ranked female player on a middle ranked professional tour. Her blog is consistently interesting whether as a competitor or observer of sport. https://megmaclaren.com/ This article summarises a podcast interview she gave about the challenges of female professional sport and her decision to turn down a lucrative opportunity to play in the Ladies European Tour tournament in Saudi Arabia. https://www.givemesport.com/88045608-meghan-maclaren-british-golf-star-discusses-liv-golf-tour-gender-equality

 

 

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