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Feb 13, 2013

Could Rudd get a rematch with the miners? The radical ALP play

Kevin Rudd is crowing his mining tax would have collected more revenue. But could he try again -- and save Labor in the process? David Llewellyn-Smith at MacroBusiness tests the play.


There is in Australian sport the phenomenon known as the “square-up”. It transpires when an umpire or referee makes a bad call favouring one team and then follows up with an equally poor decision the other way to even the ledger. Everyone acknowledges the moral correctness of the second wrong call.

The square-up seems to have suddenly become a real fear for mining. According to today’s Australian Financial Review:

“As Kevin Rudd took a thinly veiled swipe at Prime Minister Julia Gillard and Treasurer Wayne Swan over the tax’s failure to raise ‘any real revenue of substance so far’, the Minerals Council of Australia prepared full-page advertisements on Tuesday arguing that the industry had paid $130 billion in company tax and state government royalties since 2000.

“Carrying the ‘Keep Mining Strong’ slogan, which was the theme of the $22 million campaign which killed off the original mining tax and brought down Mr Rudd’s leadership, the advertisements declare ‘enough is enough in relation to the obsession with increasing taxes on mining in Australia’ …

“There was a fear that if Mr Rudd returned as leader, he would redesign the tax along the lines of the original resource super profits tax (RSPT), take it to an election and win.”

Let’s examine whether this dark fantasy is real. Would a rebooted Rudd bearing a refashioned mining tax persuade the populace?

First, the economic setting. General conditions could be favourable to the ploy. By the time of the election, the Australian economy will be at or passing over the great miming investment cliff. In theory this should give the miners a distinct advantage as they can claim high moral ground in inclement conditions. A very poor time to be imposing higher taxes on a competitive industry.

However: as we know, there is one thing that Australians associate economic strength with more than selling dirt and that is house prices. If interest rates are still falling, and they most likely will be, and house prices continue to at least grow at the rate of inflation, then there is every reason to expect that folks will feel that this renewed economic strength is precisely the right time to be extracting a fair share of taxation revenue from mining. Moreover, Australians don’t like their new economy. They don’t like mining leading it, with most of the rest of them left behind, getting slowly poorer. The hollowing out that has enabled mining to grow is fertile ground for the politics of envy.

I’ll give this one to Rudd, by a whisker.

Second, the politics. A revitalised Rudd, tax truncheon in hand, would ride a wave of relief across the polity. The illegitimacy that has plagued the Gillard government would be swept aside as catharsis bloomed in the Australian breast.

On the miner’s side would be the demonstrably abject Labor Party, it’s instability reeking of an immaturity inadequate for high office. To avoid complete turmoil and ballot box annihilation for a generation, Rudd’s coup would have to be so total and bloody that the rebirth must shine with unity. Swan would be the fall-guy.

“With the Coalition currently holding a decent lead in most polls, a Rudd mining tax platform may balance things out.”

The major weakness on this front is who becomes treasurer. This might be offset a little by selecting an old hand, perhaps Craig Emerson.

The opposition of course would take the high moral ground on this very subject. But that is unlikely to stick given their own political degeneracy. Moreover, if Rudd were sufficiently successful, Abbott would quickly find himself under intense leadership pressure as well. Although this would be modulated by Rudd leaving the coup to the latest possible instant.

Still, trust/risk would become a very difficult issue for Labor and would be the second largest issue in the contest. Possibly the largest.

Finally, in actual policy terms, the argument would be pretty straight forward: a referendum on the mining tax. Do you want mining to pay more or not? This would completely overshadow all other policies and the winner would be he who could paint the other as more extreme. The business media would be rabid in the miner’s defence and would disgorge the foulest numerical vomit upon the proposal, which would work over time. So again, Rudd would want to execute his coup only three or four months out.

The balance of political considerations is thus a point in favour of the opposition.

Third, the sentiment. This is Labor’s trump card. Righting a wrong. Balancing the ledger. The square-up. It’s difficult to quantify. But the Australian identity prides itself on balance. It’s what prevents political parties from wandering outside a strict centrist policy matrix that governs the country irrespective of who is in power. When politicians forget it, they lose.

This effect would be most powerful in Rudd’s home state of Queensland, which has also now tasted the lash of Coalition austerity. The swing back to Rudd could be large. Western Australia would desert Labor entirely. But that could be to its advantage. If mining frothed at the mouth too much, it could paint itself as the extremist and face its own backlash. The billionaires would be a major disadvantage.

I give the final point to Labor.

With the Coalition currently holding a decent lead in most polls, a Rudd mining tax platform may balance things out. But this is a simple tactical analysis. A Rudd mining platform is clearly a radical political manoeuvre and risks an equally cardinal response in the electorate.

If it backfired it would all but destroy the ALP. If I were advising I would say let this election go.

*This article was first published at MacroBusiness


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14 thoughts on “Could Rudd get a rematch with the miners? The radical ALP play

  1. zut alors

    The lesson to Rudd from 2010 was to stick to his resolve – no backdowns due to suss polls. One thing the Oz electorate respects is a strong leader who appears confident in their convictions.

    Another $20M campaign by the miners would be unlikely to sway the audience this time. There’s now plenty ammunition to fire back in the debate – including charming footage of one of the biggest miners mentioning being competitive with wages of $2 per day. What was she inferring…?

  2. Dogs breakfast

    I can’t stand Rudd, but I would have him back if he put through a mining tax that actually worked. There has to be political room for this to work, blimey, multi-billion dollar multi-nationals would normally evince scorn from the Australian public if they cried poor. What has happened to us?

    But my money says that Rudd can’t sell it, because Rudd’s problem the first time, as zut points out, was his lack of resolve when it came to a fight, from within or without.

    I don’t think he has the cojones. I think he prefers the “wounded poor little victim” who could have, would have, saved the world, if only people had been nice to him.

  3. tinman_au

    I think two thing need to happen for it to be a legitimate “square up”.

    The ALP actually has to be the ones to ask Kevin back, and Julia needs to be the fall person.

    I also think he’d do very well in cleaning up the ALP’s image issues by getting stuck in to the factions/NSW side of things…

  4. Sabre Bleu

    The Easter Putsch cometh.
    “Hi, my name is Kevin and I am here to save you”.

  5. Hamis Hill

    Bwahahaha! You can’t be serious!

  6. CML

    I think everyone should be very serious about this.
    Otherwise we are about to witness the destruction of the Labor Party. Wake up! all you Gillard fans. Whatever she is on, its not working!!

  7. Savonrepus

    Politics seriously is a lot more predictable despite the number of hearts in denial. Gillard is a failure and failure breeds failure like a tax that fails to raise any tax. It is just natural that a successful person like K Rudd is going to distance himself from all that. Labor is so lucky to have one shining light still lit to lead it out of the gloom.

  8. Savonrepus

    Politics seriously is a lot more predictable despite the number of hearts in denial. Gillard is a failure and failure breeds failure like a tax that fails to raise any tax. It is just natural that a successful person like K Rudd is going to distance himself from all that. That is just instinct. K Rudd had a mining tax that was going to raise some tax yet he was rolled to be replaced by this debacle which has miss out on collecting so much revenue for the people when mining was at its peak. Labor is so lucky to have one shining light still lit to lead it out of its gloom.

  9. GF50

    More MSM beat up to a perceived problem of their confection. Script writing and and casting for the LNP.

  10. gapot

    Julia did a deal with the big 3 miners and got the top job as a result. A very expensive PM.

  11. Hamis Hill

    Aesop’s Fables: The Fox and the Crow.
    “Come on! you know you want to drop your support for Gillard”.
    It is a bit old to try this on seriously.
    A Labor spill is in the interests of the conservatives only.

  12. Enis Ruzdic

    I always said Kevin Rudd is the best PM Australia has ever had. When they assassinated him, it looked really bad. Then, once we found out how he was assassinated, it warranted a crime. And finally, once we found out what his replacement was like, it warrants life sentence. The worst PM in history to be trailing against the worst opposition leader in history questions all who is really running the ALP. All this can be corrected. All they need to do is reinstate People’s PM – Kevin Rudd.

  13. Thorn

    I have never bothered particularly with who the leader of Political parties are. I voted for labor when latham was the leader, not because of his being leader, but because labor has an actual social justice agenda. I would have voted for the Liberals when Howard was their leader if I thought they had anything positive to offer the majority of the people in this country, not just those willing to be bought by his middle class welfare bribes. I would vote for the Liberals now, even though I dislike Abbott intensely, if I thought they had a range of policies that made any sense at all instead a whole lot of disjointed catch phrases tossed out there to impress the people that make minimal effort to understand what is actually going on.

    So whether Gillard or Rudd or anyone else leads the labor Party is immaterial to me – just show me the policies and I will compare them to the Liberals and see which stacks up.

  14. Hamis Hill

    Yes, the palace eunuchs of the press gossipng and plotting yet again.
    Publishing policies? Why?
    Are we in a democracy or something??


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