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.