Green plan hurts our reputation

Recent political opposition to foreign investment in mining will damage Australia's reputation as a safe haven for global capital.

Before taking the balance of power in the Senate, the Greens served notice to the Government over their key policy priorities.

A return to Kevin Rudd's resource rent tax model is one of these, a 40 per cent broader tax on mining with revenues funnelled into a sovereign wealth fund (meaning, no future tax cuts).  And what are the Greens leaning on to reheat the Rudd mining tax plan?  Capital xenophobia, or the fear of the foreigner in the investment realm.

Antipathy towards foreign investment has long struck a chord within the Australian psyche, or at least for people with a predisposed inclination against market forces.

Today the hostility towards foreign interests in mining exploration and resource development comes in two related forms.

First there is a widespread, but misplaced, view that mining is aggravating a ''two-speed'' economy leaving families in Australia's south-east behind in the wealth stakes.

Second, a concern has emerged that foreigners are looking to ''buy up the farm'' to mine it.

Because of our historical shortfall in domestic savings to finance big investments, Australian miners have had to marshal foreign savings to build up our mining to be the big employer and export earner today.

The Greens' suggestion that this is a bad thing does not square with the reality of the substantial benefits mining brings to Australia.

With the backing of foreign capital, miners can purchase specialised capital equipment.

Even so, this machinery cannot operate alone.

This is why the mining sector employs thousands across many occupations, from managers and engineers to mine workers and truck drivers.

Mining profitability is an economic signal of success, drawing in even more miners to work the earth.

This growth benefits more Australians, including mining company white-collar workers, shareholders and workers in allied industries.

It seems Greens' policies are inspired by the idea of equalising national wealth by levelling down activities undertaken by a successful sector of the economy.

The effect of a proposed federal mining tax with a higher rate and broader base will be to further reduce the economic returns accrued from mining, making Australia less attractive for investment and reducing national income.

At least the Australian Greens are consistent in that they not only oppose the importation of capital but skilled migration as well.

They are even suggesting tighter regulation of a foreign investment policy regime assessed by the international economic organisation OECD as already one of the most restrictive in the world.

But deterring mining foreign capital, through higher taxes or more intrusive regulations, is the last thing that a presently fragile Australian economy needs.

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