Michael Gable

I have known Lang Hancock’s grandson, John Hancock @john05970496, for years—as a friend, and as an investor. He told me this story a long time ago. I have been thinking about it today. In 1960, a government geologist looked at the Pilbara and wrote, in effect, that Australia was running out of iron. There was some ore, he allowed, but not enough even for the country's small steel industry. Exporting it would be reckless. Canberra agreed. The ore was embargoed. Lang Hancock spent the 1950s and the first half of the 1960s asking for permission to sell overseas. The answer was no. The analysis, it turned out, was off by tens of billions of tonnes. The ban came off in the mid-1960s, after nearly two decades of lobbying. What Hancock did next never appears in the white papers. He found the money. He hustled for the customers. He assembled the geologists and the engineers, and the trucking men who followed the ore. Last year that ore was worth $126 billion. Add the wages, the ports, the rail, the contractors, the shops in towns that exist because the trains still run, and you are looking at something like 450,000 jobs and more than $30 billion a year in tax not to mention the retirement system reaps the investment returns today from iron ore. That is one of the reasons Australia is a rich country. A country that wants the next Hancock does not write tax rules that treat a wager as a moral failing. The latest CGT proposals do exactly that. They discourage the bet that creates the mine, the plant and the payroll. That is not the thinking that turned a bad embargo into a national fortune. Prosperity is not a natural resource. It is what happens when someone is allowed to find one. We have no trouble holding our sporting stars in high regard. We should do the same for our entrepreneurs.