The Tragedy of the Mining Tax

Paul Kelly’s account, in his excellent new book Triumph and Demise, of how Labor bundled its mining tax makes for excruciating reading. It highlights the chaos, dysfunction and incompetence of the Rudd government that a tax, intended on spreading the benefits of the mining boom, could be so unpopular as to destroy a Prime Minister. That is exactly what happened.

At the heart of its failure was the lack of consultation between the Government and mining companies. Prime Minister Kevin Rudd and Treasurer Wayne Swan thought they had a political winner on their hands with a mining tax. They believed it was capable of coercing the mining companies into accepting a deal with the Government on Labor’s terms. This would require public support for the tax. It was not forthcoming.

Resources Minister Martin Ferguson reveals that the mining companies were not opposed to the principle of a mining tax, however they expected to be consulted.
Rudd and Swan did authorise Ferguson to tell the mining companies that the Government would be consultative. They would not stay true to their word.

Kelly argues that Labor had no intention of consulting them, even excluding Ferguson from the process. It was a classic example of Labor’s use of style over substance.

Kelly claims that they wanted a fight. Rudd, having shelved the ETS, and accused of lacking conviction, wanted to show he had backbone. However, Labor was not prepared for the angry opposition it would instigate.

The mining companies initiated at $25 million campaign opposing the tax. They argued it would severely hurt the industry, jobs, growth and the economy. No doubt they exaggerated these claims but as Kelly states, the mining tax was essentially a 40% new tax on our most important industry, how could it not hurt the economy?

Beneath the economics was the sentiment amongst mining companies that they were being treated with contempt, despite their consideration of having contributed significantly to Australian society. For example, BHP Billiton paid more tax than any other company in the country. Andrew Forrest was working with the government on a programme to aid Aboriginal children.

From the Government’s perspective, this was a David and Goliath struggle to ensure that regular Australians received their fair share. They would not be dictated to by vested interests and big business that selfishly wanted to rob many Australians of the benefits of a once in a generation mining boom.

Unfortunately for the Government, public sentiment was with the miners. According to Newspoll only 28% of the public supported the tax with 48% opposed to it.

For the opposition, it was a gift. Rudd had months earlier shelved the ETS as Tony Abbott’s campaign against the ‘great new tax on everything’ gained traction. Now he was announcing another ‘great new tax’ this time on Australia’s most important industry. Abbott went to town on the issue, as did the rest of the Liberals and Nationals, who couldn’t believe their luck.

To top it all off, Rudd and Swan failed to consult with the states, which technically owned the mining resources. They had been left out of the details and feared losing their royalties. They too would join in the opposition to the tax.

Labor was fighting a war on three fronts, with public sentiment firmly against them. It wasn’t that the public opposed having a mining tax but rather opposed the truly archaic process of its implementation. It fed into the growing narrative of chaos and dysfunction surrounding Rudd and his government.

Kelly argues that the mining tax would be the dagger in the heart of Rudd’s leadership. It was the moment that Rudd lost the support of a large part of his caucus, notably his deputy Prime Minister. The rest, as they say, is history.

Nick Cater Sums up Asylum Seeker Policy to Perfection

Australia is one of fewer than two dozen countries in the world that sets aside a portion of its annual migrant intake for humanitarian aims, and the size of the program makes it one of the most generous.

Yet the program, operated in close consultation with the UNHCR, has been effectively frozen for the past few years as officials process many thousands of applications from people arriving by boat. Meanwhile, millions who have been displaced in the Middle East, notably in Syria, and in Africa, have no hope of finding shelter in Australia unless they are able and willing to pay a large entry fee to criminal gangs indifferent to the loss of human life.

The fraudulent claim that an open borders policy is “compassionate” has been exposed. It is time we asked for our word back.

Eddie vs Priddy

In the war of attrition between football clubs, the fight off the field is just as important, if not more, than the fight on it. Middle-aged men with receding hairlines and growing stomachs explode onto our screens and radios from time to time and remind us of this never ending war. Sometimes we forget its existence, our focus is on the football, but sometimes the football isn’t all that exciting compared to an all in administrative brawl. It’s not the same as an on-field brawl of course, no punches are thrown….hang on.

This week’s off-field brawl is between Collingwood President Eddie ‘Everywhere’ McGuire and Sydney Swans President Andrew ‘Is this thing on?’ Pridham. It all started in a rather ‘petty’ way you can say. Sydney coach John Longmire rejected an offer to be assistant coach of the International Rules team later this year because he didn’t want to work with McGuire, the team manager. McGuire thought it was all rather ‘petty’ and said he has put aside personal interest for the national team, so should John.

Well Sydney President Pridham didn’t let that one pass.

“It is a crazy world when Eddie McGuire is not content with just running the AFL, he’s now protecting our national interest. I can’t help but see a comparison between Eddie’s patriotism and protection of the national interest and the fact Clive Palmer is currently dominating the political agenda in Australia. I’ll leave you with that to think about.”

The Clive Palmer analogy is rather hilarious. It might the funniest thing said by any club President since Jeff Kennett promised no-body would hear from him as President. Andrew Pridham had made his point and found himself in the limelight. Eddie seethed and returned serve as only Eddie could…with utter rubbish.

“They have wound up Caroline Wilson to start running this campaign that I am the most powerful bloke in football and have too much to say and all the rest of it. I haven’t been powerful enough otherwise we may not be where we should be at the moment.”

It’s all a grand conspiracy you see.

“They are the greatest protectors of their self interest of any organisation God has put breath into,”

Let’s pause and reflect on that comment for a moment. Eddie McGuire is complaining about an organisation protecting itself self-interest. Oh the hypocrisy!

“These blokes haven’t developed anything up there … that’s why Jarrod Witts is playing first ruck for Collingwood, that’s why Lenny Hayes has been a superstar down at St Kilda.”

Errr……Jarrad McVeigh, Brandon Jack, Kieran Jack, Lewis Roberts Thompson, Harry Cunnigham, Craig Bird, Dane Rampe. All NSW developed players, but why let the facts get in the way of a good story.

“They have let blokes march out of the joint because they have had no interest ’cause they open the chequebook up and go after everyone. They have been doing it since Gerard Healy went up there.”

He’s right Sydney have signed some real big names in the past 25 years. Craig Bolton, Martin Mattner, Ben McGlynn, Nick Davis, Josh Kennedy, all household names before they came to Sydney! HA!! 

Another unfinished chapter in the never ending Off-Field brawling chronicles. May they never end! . 

Politics in crisis and a nation in denial? According to Paul Kelly it is.

An absolutely brilliant article in the Australian today from Paul Kelly.

“THE trajectory of Australia’s relative decline now seems set with the nation in denial of its economic challenges and suffering a malaise in its political decision-making — signalling that a country that cannot recognise its problems is far from finding their solution.”


It gets better.

“Any nation that has lost the art of collective self-improvement has stepped on to the escalator of decline. Australia is on that escalator. Its politics are so noisy, egotistical, destructive and consumed by self-interest that it has missed where the escalator is heading.”

Who is to blame?

“The troubles of the Rudd-Gillard era, usually attributed to their fierce leadership rivalry, can only be grasped in the context of the malaise within the political system. The omens suggest this might only deepen under the Abbott prime ministership.

The institutional question arising from Tony Abbott’s policies is whether a reforming prime minister can succeed any more in this country given the decisive shift in the system and culture against reform. The last three prime ministers were destroyed over management of their reform agendas: John Howard on Work Choices, Rudd and Gillard on a mix of climate change, mining tax and fiscal policy.

Recent history is defined by the triumph of the negative and fatal blunders on the part of agents for changes, witness the ACTU campaign against Work Choices, the mining industry campaign against the mining tax, the Abbott-led destruction of carbon pricing and, most recently, the undermining of the Abbott-Hockey budget on the crusade of fairness.”

Basically both sides are to blame. 

Also, the media

“During the reform age, roughly 1983 to 2003, the media was pivotal in backing national interest policies but that age is passing. It is replaced by new media values that mirror the fashionable narcissism and find national interest debates as quaint and irrelevant.”

Disappointingly he provides no solution. 

“Australia’s prosperity is living on borrowed time, courtesy of past reforms and the China boom. There is a silly, contested debate about whether Australia faces an economic crisis. There is no doubt, however, that Australia is undergoing a crisis of its political system.”

Nonetheless, it is one might rant against the current political landscape and with Clive Palmer proving to be as erratic as was envisaged, expect many to shake their heads in furious agreement with Mr. Kelly.