Here we go again — more rumours that the government is about to cave-in on the RSPT.
Terry McCrann was the chief spruiker for the rumours. “The Rudd government will announce major changes to its proposed resources super profits tax today or tomorrow,” he told readers this morning.
No, it won’t, Terry.
The changes that McCrann insisted the Government was about to make consisted of the same old same old — dumping the allegedly valueless transferability and deductibility of losses, and bumping up the rate at which the tax would apply to well above the long-term bond rate — plus omitting quarries and putting coal seam mines into the PRRT.
Quarries were included in the RSPT — against the recommendations of the Henry Review — on the basis that some low-value commodities might be better off under the proposed arrangement — but with the specific proviso that if it was not the case that it would be beneficial for such low-value commodities to be included, then they’d be omitted. The industry has been vociferous in declaring they wouldn’t be.
Predicting their eventual omission doesn’t exactly require a crystal ball — but it does require an understanding that there’s a consultation process going on currently, and scheduled to go on for quite some period of time.
The rumours about a cave-in were wrong a fortnight ago and they’re wrong again. They say a lot more about a mining industry that had a shocker of a week, than about the government.
Government MPs were privately almost mystified at the lack of questions from the audience about the RSPT at this week’s community cabinet. They expected it to be a dominant issue in the minds of suburban Perth residents. It barely registered. All the colour and movement instead came from a near-comical rally at which Andrew Forrest played dress-ups. Forrest, along with Palmer, was caught out during the week in his claims about the tax. Xstrata, too, is under increasing pressure over its claims about its “closure” of the Wandoan coal project in Queensland. Sophie Morris, in a nice get, revealed today in the Fin that it was still buying up land for the project it had supposedly kyboshed. And it’s no longer clear whether any jobs will be affected by the “closure”, since Xstrata can’t seem to explain exactly which existing jobs will be affected.
With the industry campaign starting to fall apart under the weight of its own hysteria, it probably made sense to circulate some more rumours about an imminent government backdown — happily amplified by the industry’s media supporters.
So there is actually some value to these rumours after all. The more they circulate, the more it suggests the industry is worried the government is doing something no one ever thought it would — sticking to what it says.
And what it said was that it was happy to negotiate important issues such as transitional arrangements and implementation details over a period of months, but the basics of the RSPT were not going to be compromised.
Bernard, we won’t know until Sunday whether McCrann’s ruminations are true or otherwise. He’s usually correct in his prognostications on interest rates. This, of course, is a different matter. But let me say this: Simon Crean was absolutely correct to point out the lack of consultation. Let us hope some of his colleagues were listening to what he said.
Bernard, the mining industry didn’t have a shocker of a week.
The community cabinet may have been easy for Rudd but the Crosby Textor poll was a shocker for the government. Read all about it in The Australian June 11, 2010:
“Cabinet cracks emerge on mining tax” by Matthew Franklin :–
“Polling released by the mining industry yesterday found that only 3 per cent of West Australians wanted the mining tax introduced, with the level of support failing to pass 20 per cent in any state or territory.”
How odd I actually started feeling a change in the wind this morning. I don’t know why!!!! I vaguely heard about the community thing but I thought I just mis-heard. Is the mining industry argument collapsing in on itself with its self-importence? I think I will wait and see.
Is it just me that sees the apparently inexorable trend in Australian politics and government to irrevocably tie revenue (both national and individual) more and or directly to the conscience-less bottom-line fixation of local and globalised industry and finance as a disaster for any national imperative that doesn’t generate maximal profit?
Like social, medical, environmental or cultural issues?
Talk about painting yourself into a corner . . .
Hysteria needs a quick and easy result if it is to succeed. Time is not good for hysteria – try it yourself and see how long you can remain hysterical before collapsing in a heap at the sheer farcicality of your own behaviour.
Despite the general run of media commentary (Keane excluded) there is value for the government in waiting the mining companies out. Despite their best efforts real evidence and rationality keeps breaking through, all of which undermines their hysterical claims and leaves the Coalition looking like weak-minded shills.