The West

Federal Treasurer Wayne Swan has renewed his slanging match with Gina Rinehart after the mining magnate said resources projects were cheaper in the USA because they could use illegal labour.

In a video posted on the Sydney Mining Club’s website, Ms Rinehart highlighted how Australia was becoming a high-cost place to do business because of the mining and carbon taxes, red tape and high wages.

She warned the high cost environment was already seeing miners invest overseas, particularly in Africa, instead of in Australia.

“The Business Council of Australia’s recent report Pipeline or Pipe Dream reminds us of the danger of counting unhatched chickens,” she said.

“The BCA like so many now notes our competitiveness is falling, particularly in delivering major resource projects. Labour costs are typically 35 per cent higher here than on the United States Gulf Coast and they also can have lower labour costs still if they utilise illegal labour from Mexico and the South.”

Ms Rinehart later went on to say: “Business as usual will not do. Not when West African competitors can offer our biggest customers an average capital cost for a tonne of iron ore that’s $100 under the price offered by an emerging producer in the Pilbara.

"Furthermore, Africans want to work and its workers are willing to work for less than $2 per day.”

“What was too-readily argued as the self-interested complaints of a greedy few is now becoming accepted as the truth, and more ominously is showing up in incontrovertible data,” she said.

Ms Rinehart called for action on making Australia more competitive, blaming mining and carbon taxes, red tape and high wages for the economy's “sluggish” performance.

She called for bold and imaginative plans to revitalise Australia's mineral rich north, with fewer regulations and taxes.

She said to point out Australia’s competitiveness was sliding was not an act of self-interest but a call to action.

Ms Rinehart went on to praise the Federal Government for approving her request to import 1700 foreign workers to help build her massive Roy Hill iron ore mine in the Pilbara, saying it recognised spiralling costs were a problem.

Mr Swan, who attacked Ms Rinehart last week for suggesting the minimum wage should be lowered, seized on the latest comments.

“The only Australian not getting sick and tired of this almost-daily pearl-rattling from Gina Rinehart is her loyal servant Tony Abbott,” he said.

“Not only has Gina Rinehart told her paymaster Tony Abbott he should consider slashing the minimum wage, now she’s says a competitive way to lower labour costs is by utilising illegal labour.”

Prime Minister Julia Gillard said today Australia would not compete on wage rates compared to Africa but we have other advantages and mining investment is strong.

“We are not going to have wage rates the same as the wage rates in Africa,” Ms Gillard told ABC radio today.

“We mine differently than in other countries.”

The Prime Minister said said Ms Rinehart was a “well-known opponent” of the mining and carbon taxes but that she disagreed on both points.

She said Australia would continue to have strong investment in mining projects.

“We've seen billions of dollars of new projects announced by the mining industry since they knew that there was going to be a minerals resource rent tax and since they knew that there was going to be carbon pricing,” she said.

“We're going to compete on our great mineral deposits, our application of technology and high skills to the task.”

Ms Gillard acknowledged some companies had paused or delayed plans - such as Fortescue, which announced on Tuesday it would shelve $1.57 billion of expansion plans and cut hundreds of jobs.

The West Australian

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