My Say No. 67 – Is it good or bad news?

My Say – No. 67
18th July 2021

Is it good or bad news

With lockdowns dancing around the country it is hard to focus and with time on one’s hands scanning trivia becomes a bit of a trap. However, a piece in the Sydney Morning Herald, Monday 28^th June, that resonated with me I considered as worthy of further attention.
The headline was, “Mining, energy exports hit a record $310 billion”, but my heart sank as I read it; reminding me of an ongoing problem. The question is why?
This triggered my ‘digging up’, pardon the pun, an article below which was written in 2003.

Added to this was a recent academic paper I had read.
The core of the issues from my perspective are the misconceptions Australians have regarding mining in Australia.

To sum up, Australians believe that the mining sector: Employs nine times more workers than it actually does (less than 2%), accounts for three times as much economic activity as it actually does, and is 30 per cent more Australian-owned than it actually is.
Sadly, Australians have so little interest in shares in Australian businesses; the driving force of this nation. Add to this our mindless love affair with property and we end up with the bulk of the productive capital in this country sunk into totally unproductive property whilst a large chunk of our economic engine is in the hands of foreigners.
Most readers would be aware of my abiding love of dividends and here is the most painful aspect for me. Every year tens of billions of dollars in dividends and profits flow out of this country to the overseas owners of these businesses.
How can this be allowed to happen?
Allow me to enlighten you. Having come this far I resurrected another spread sheet; the Register of Pecuniary Interests for our federal politicians. If you have nothing to do on a rainy Sunday this is a publicly available record of the financial interests of our government representatives. It was introduced to keep the b*****ds honest (stop laughing).
Having done the same exercise many years ago with the NSW parliament I was not surprised to see a similar result. The bulk of our federal parliament are into negatively geared property and apart from a tiny handful of committed members, the shareholdings in Australian companies by members are paltry.
Roughly, over 150 investment properties are held by around 85 members whilst 51 own shares with only 18 holding more than 3 shares each! This is the contempt with which the leaders of this country treat the backbone of the nation.
Whilst on the topic of dividends, in my last newsletter I indicated the minor covid hit we had taken on our dividend income last year, roughly -15%. Since June 30^th has now arrived, I have compared our income for the last six months of 2020 with the first six months of this year. Pleased to be able to report an uptick of 10%.

The next dividend season for the second half of this year kicks off in Aug – Sept and I am reasonably confident that we will see an improvement again. Same old, same old!