I’ve not posted on the latest mining tax brouhaha in the past few days, largely because it seemed all sound and fury signifying nothing. As I have argued for the past two years, the monstrously conceived tax had almost no chance of being reformed given the Gillard government came to power on secret concessions to miners and such illegitimacy was never going to be willingly revisited by Canberra.
It looks like I was right with the double-dealing of the Prime Minister on display this morning, from the AFR:
The federal government is considering plugging the royalties hole in its mining tax but will leave any changes until close to, or after, the election to avoid triggering another damaging campaign by the mining industry.
A letter from Prime Minister Julia Gillard to independent MP Rob Oakeshott, who is demanding the tax be toughened, says the government shares his concerns “about the interaction of state royalties and the minerals resource rent tax’’.
In the letter, sent on Monday, Ms Gillard notes the GST Distribution Review panel reported last year that allowing mining companies to deduct all present and future royalties they paid state governments from their MRRT liabilities was “neither desirable nor sustainable’’.
“The government is considering the GST Distribution Review and will take into account the views of states and territories,’’ she said.
But, said some strategist:
“It would be preferable not to have another $22 million campaign waged against us,’’ the strategist said.
I’m not sure why said strategist is still in employ. This is truly a political schmozzle of epic proportions.
Somehow the government has turned a no-brainer tax, that benefits the vast majority of Australians at the expense of just three multi-national firms, into a lightening rod for its own illegitimacy.
If it back-flips on the miners, it looks like it can’t be trusted. If it stays the course its minority partners will howl betrayal. Whichever way it goes the Opposition can have a field day.
If ever there was a lesson in poor policy implementation this must be it. The carbon tax is exceptional by comparison.
