The proposed resource super-profits tax thrust on to unsuspecting miners has united these normally warring barons in an unprecedented fashion.
At the same time, the government appears uncertain how to approach the miners and manage the inevitable compromise in a policy and political sense.
One day the government rounds on the lying and ignorant industry leaders, as Wayne Swan called them, and on the next Kevin Rudd is talking about consultation with the industry.
Some within the government are suggesting there will be a quick offer and settlement of the dispute to get it out of the way, while others warn not to expect an early resolution and relish a fight with the foreign-owned mining companies that don’t pay their “fair share”.
BHP Billiton’s chief executive Marius Kloppers told his 16,000 employees yesterday the government’s claims were incorrect about the amount of tax miners pay and that the process of consultation and negotiation was at a stalemate. The clear view from the mining companies is that the consultation panel set up to negotiate “transitional arrangements” has a limited remit and cannot discuss the real concerns the miners have about the new tax. Given the panel seems to be moving beyond its own terms of reference in its interim report, to be put to the government today, and backing big concessions on the tax, including lifting the threshold rate when the tax begins from 6 per cent of profits to 12 per cent, it would seem the panel members agree.
The government continues to insist the consultation process is going swimmingly and is appealing for the industry to continue to talk to the panel. But, given the panel can’t make final decisions on issues the miners want addressed and the mining chiefs and government leaders continue to “negotiate” through headlines and parliamentary insults, there appears the need for something to break the deadlock and bring the debate back under control.
Given the government points to the Hawke government’s success in introducing the petroleum resource rent tax, perhaps the Prime Minister could convene a 1980s summit, where chief executives and cabinet ministers meet face to face and under pressure to find middle ground.
Given that Rudd decided last night not to attend and address the Minerals Council of Australia’s annual dinner after deciding instead to attend the celebration for the 100th anniversary of the election of the Andrew Fisher government, a Hawke-style summit is unlikely.
What’s more, the 1987 tax followed more than two years of consultation, including a white paper and a green paper, to work out the best way to introduce the tax and not damage the oil and gas sector. It seems too late for such a process now, given that the tax was sprung on the resources sector, fully formed, on May 2.
Some MPs, and indeed some ALP candidates who are attending today’s campaign briefings, are furious with the way the tax was introduced and are uncertain as to how to react to mooted changes and avowed declarations of war. There are miners and MPs who are convinced the government was intent on such a war from the beginning.
Labor claims that part of its polling slump and the Prime Minister’s polling slide are a result of the “tough actions” the government took on tax reform. But the slump began well before the RSPT was unveiled and the miners unleashed their public campaign.
Indeed, the miners were slow to react publicly to signs they were about to be subjected to a regime they could not bear because they had worked more quietly with the government over the proposed Carbon Pollution Reduction Scheme.
But Rudd appears to have caught slump disease from British Conservative leader David Cameron, who managed to blow an unbeatable lead in the polls months from an election and only scraped into government, long before the miners became active.
Rudd has gone from being the most popular leader in modern times to having some of the lowest levels of personal support, and the ALP has gone from having an unassailable lead in the polls to being behind or at best level-pegging. This is just three full months from an election campaign.
There has been a mountain of explanations as to why Labor finds itself in this position: a loss of faith and credibility for Rudd; broken promises; botched programs such as the $2.45 billion roofing insulation scheme and waste on the school buildings program; interest rate rises; cost of living rises; the abandonment of the emissions trading scheme to combat greenhouse gas emissions; a reversal on asylum-seekers’ treatment; and, latterly, the new $12bn tax on miners’ profits.
The question for those Labor MPs who fear losing the election is no longer how they got to where they are but how they get away from where they are.
Certainly, as Labor MPs and candidates gather in Canberra today for a briefing and instructions on how to campaign and sell the government’s achievements, the way ahead is the key issue.
The latest Newspoll has Labor’s primary vote at 37 per cent, a level that Labor must improve on if it is to win the next election. There is no doubt the polls will narrow as the election nears and Labor has the advantage that voters are not switching in sufficient numbers to Tony Abbott from Rudd as the preferred prime minister.
How and when to deal with the mining profits tax compromise is crucial to these calculations as the Liberal leader continues to oppose the “great big new tax”.
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