Today in Crikey, Bernard Keane contends that “the credibility gap between what the miners and their cheerleaders say and reality grows ever bigger”.
But how to sift out the spin when much of the talk around the Resources Super Profits Tax is based on market sentiment, a fickle beast at best? As speculation mounts that the government is set to amend the aspects of the new regime, Robert Gottliebsen writes on Business Spectator this morning:
The greatest capital strike in Australia’s history officially started at 10am on May 24, 2010. Australia’s second largest minerals company Rio Tinto announced that all its expansion projects would be put on hold and that delay could extend for years if not indefinitely. Moreover, it plans to curb early stage development in Australia and has expressed grave concerns about the sovereign risk implications of parts of the mining tax.
But Keane writes:
Far from the government preparing to cave in on the issue, as some hysterical commentators are trying to suggest, its resolve is hardening. Labor knows a back flip on the issue will be politically fatal to its credibility. It is prepared to negotiate aspects of the new regime, but it is also aware that different sections of the mining industry have different stakes in this — so far we’ve mainly heard from the big foreign companies, not smaller local companies that will benefit from the shift from a royalty to a profits-based regime.
Labor’s problem is that support for the RSPT is slipping – although Essential research today still has more Australians backing it than opposing it – and a Prime Minister who at the moment couldn’t sell a cold beer on a hot summer day. Tax reform is partly about salesmanship, and Labor needs to lift its game to convince Australians that its new tax will benefit all of us.
In the meantime, mind the gap.