It is reported that the proposed tax on the iron ore and coal industries has been a political football for a couple of months now, but various players have changed teams as the agendas shift in the run to the federal election.
Less than a month ago the divisions were much clearer. It was the mining industry on one side and the Rudd government on the other. Mr Tony Abbott's Liberal Party was backing the industry, motivated more by politics than ideology.
Ms Julia Gillard's politically expedient decision to do a U turn on the mining super tax and strike a deal with some of the large mining companies, including BHP Billiton, Rio Tinto and Xstrata, has changed the rules of the game and fractured some of the alliances.
The Greens leader Mr Bob Brown has upset the dynamics of the debate even more this week. Within days of agreeing to support Labor if his party held the balance of power in the Senate after the election, he threw a spanner in the works by announcing he would not support Gillard's mining tax and would be pushing to raise more from the industry. This tax is as close as Gillard has come to a firm election proposal, so it does not bode well for co operation between the Greens and Labor.
As for the Liberals, their fight against any new tax on the mining industry left them looking isolated and silly when the big mining companies agreed to a compromise mineral resources rent tax with Gillard.
The deal between Gillard and BHP/Rio/Xstrata has split the mining industry, the small to medium sized companies versus the large. The smaller emerging members of the industry are being corralled by the Fortescue boss Mr Andrew Forrest. He made it clear yesterday that they will mount a new advertising campaign against the tax by the weekend unless they get some concessions from the government.
The smaller miners reckon they will be done over by the tax because it fails to address their financing and infrastructure needs and leaves them at a competitive disadvantage to the bigger established players, which are less concerned with these issues.
Ms Gillard now has to deal with the prospect of a new and potentially well funded group of miners. Fortescue did not contribute to the previous advertising campaign but will throw its financial muscle behind any new one.
Mr Forrest has turned his own public relations campaign to Queensland, where he will meet like minded coalminers today. If Ms Gillard has abandoned the small end of the industry and tied her fortunes to BHP and Rio, it has left the little guys with no choice but to join forces with the Liberals, who at this stage still appear unlikely to win government next month.
Ms Gillard said that her agreement on the mining resources rent tax remains firm despite Brown's protests. However, without support from the Greens, it is doubtful that the mining tax legislation can be passed. This leaves Labor caught in a pincer between the small miners and the Greens.
(Sourced from www.smh.com.au)
