For all Gough Whitlam did, he also left Australia some unfinished business — particularly, how can the Australian public get a fairer share of the profits from the extraction of its non-renewable resources, flowing largely to foreign-owned mining companies?

The quandary helped Whitlam come undone, as it did Kevin Rudd. As this excellent radio documentary produced in 2012 for the ABC’s Rear Vision program showed, both sides of politics in Whitlam’s day feared Australia was “selling off the farm” to foreign miners like America’s Utah, which were repatriating profits overseas.

The formation of the Organization of the Petroleum Exporting Countries and the oil shock of 1973 was the consequence of a wave of nationalisation of resources projects worldwide, and Whitlam was swept up in it. He commissioned the Fitzgerald Review, which showed extraordinary degrees of foreign ownership and expatriation of profits. Then-minerals and energy minister Rex Connor created a new Petroleum and Minerals Authority, a statutory body that could get involved in joint projects with private resources companies in developing Australia’s natural wealth.

As former secretary of the department of primary industries and energy Paul Barratt told Rear Vision:

Well, they introduced strong foreign investment policy for all minerals so that there was a Foreign Investment Review Board and the Treasury had to look at all proposals for new mines and determine whether they were in the national interest. And the assumption was if there was 50% Australian equity that would sail through, but otherwise there would be a decision to be made. Second … they passed legislation in 1973 to establish a Petroleum and Minerals Authority, and it was to be a government agency that could take investment positions in new mines, so it could become an equity holder. That enabled the government to insist that people who claimed they couldn’t find enough Australian equity to get up to 50% to go and talk to the Petroleum and Minerals Authority. It didn’t mean the PMA would necessarily take a position in a mine, but it meant that you couldn’t say you hadn’t tried hard to get equity if you hadn’t talked to the PMA. And in fact in the early years of the policy, Rex Connor, the minister, was quietly telling companies, ‘If you can find 25% Australian equity, we will support your application.’ So the 50% was aspirational and anything above 25%t would get a tick.”

The proposal caused uproar in the mining industry, and the legislation, only passed after the double dissolution election of 1974, was repealed when the Fraser government took office after the dismissal in 1975.

Fast forward to 2010 — past the Hawke government’s introduction of the Petroleum Resource Rent Tax in 1987 — and the introduction of Rudd’s Ken Henry-designed Resources Super Profits Tax, levied at 40% of income above a risk-free rate. Arguably the most contentions aspect was the idea the government would become a silent, joint-venture partner in mining projects, effectively sharing 40% of the upside and 40% of the costs — see this excellent discussion by Fairfax Media’s Peter Martin. Opponents like Fortescue Metals billionaire Andrew Forrest said he did not want the government as partner and called the RSPT a “40% nationalisation” of the mining industry.

The likes of Bruce Teele, former chairman of the venerable Australian Foundation Investment Company (AFIC), harked back to the Whitlam days :“We can see similar characteristics,” Teele said. “There is the same philosophy to make the public sector a bigger part of the economy. Then it was financed with debt and this time it is increased with tax.”

Once Rudd was ousted and the three big miners BHP, Rio Tinto and Xstrata (now Glencore) were done with new leader Julia Gillard and then-resources minister Martin Ferguson, the watered-down Mineral Resources and Rent Tax was barely worth the bother — at least, that seemed to be Henry’s view.

But with the mining tax gone, we are not quite back to square one. The MRRT did unintentionally spur the state governments of Western Australia, Queensland and New South Wales to lift royalties substantially. Given the price slump in key commodities (iron ore and coal) that has since befallen the mining industry, they may rue their abandonment of advocacy for a shift to a profits-based tax.

Former long-time Treasury secretary John Stone recalls in this morning’s Australian Financial Review that the Whitlam government was “incorrigibly hostile to business generally … Connor notoriously described Australian mining industry executives as ‘hillbillies’.”  Scandalous!

But Connor’s legacy may be due for reappraisal. The disastrous Khemlani loans affair, which signalled the death-knell of the Whitlam government, was partly triggered by Connor’s desire to fund a pipeline to bring gas from the North West Shelf over east. Given the vast gas resources that have since been discovered off the coast of WA, Connor’s dreams for a national energy grid look visionary. Four decades later, with the mooted Alice Springs-Moomba pipeline, Australia will finally complete a pipeline network extending all the way from Bass Strait to the Browse Basin.