The Federal Government’s RSPT tax on mining companies continues to be the biggest political battleground as we head into another week of pre-election squabbling and electioneering.
It’s an issue far larger than just pure hip pocket economics — class, geography and ideology all underpin a lot of the strong passions keeping the debate running hot. Is the government siding with ordinary working Australians against Big Mining? Or conspiring against the future of our blue collar workers by punishing a booming industry and employer?
A panel of officials are set to give their analysis on the proposed tax at the end of the week, but the Oz is reporting today that they will recommend the government scraps its promise to bear 40% of the cost of failed mining projects — sure to go down like a lump of iron ore.
Meanwhile, the Opposition is claiming the Government’s maths are irresponsible and based erroneously on a paper by an American college student.
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In WA, the tax is being blamed for a sudden drop in local company stocks, and former ALP member Scott Cowan has launched an entire party to fight the tax, arguing it’s all about giving more money to Victoria and NSW at the state’s expense.
And the debate is only set to get hotter, with the mining industry today launching an advertising blitz on radio and the internet, with its Keep Mining Strong campaign.
In today’s Oz, Treasurer Wayne Swan puts his case for the tax:
… the RSPT will broaden and strengthen the economy, ensuring all sectors grow in a sustainable way.
Here’s how the pundits have responded:
Andrew Main: Ditch the mining tax safety net
The government may have to change this tax; ironically, the first concession should be the removal of the tax loss safety net.
Sydney Morning Herald
Editorial: Rudd’s tax hatefest worry
… we need more clarity and rigour.
Ross Gittins: Shonky advisers have led Rudd badly astray
… the resource tax is so pure – so carefully designed to ensure it doesn’t do all the bad things it’s being accused of – that it’s impossible for anyone who’s not a paid-up economist to understand.
Neale Muston: High price paid for resource tax’s poor implementation
Unfortunately the government has fallen foul of ill-timed and poorly executed implementation, and that has cost all Australians far more than this tax will recoup for several years to come.
Max Walsh: Rudd government squanders political capital
The Rudd government is fast earning Australia the harmful reputation of posing a sovereign risk to investors.
… the debate was out of control last week … This week won’t improve, with a doom-and-gloom advertising campaign
… its preparedness to take on 40 per cent of the risk for ventures that make a loss… is an entirely unrealistic policy for any Government stick to and the mining community knows it.
Business Spectator, Robert Gottliebsen: Rudd’s dollar delusion
I can’t recall a government action that has caused so much global consternation.