The mining super-profits tax debate - an analysis

Given this, it would be legitimate for Labor to consider some restructure of its mining tax proposal to more precisely match regimes already existing and maintained successfully. By this I refer to the existing resource rent arrangements that apply in areas of the oil and gas sectors. That such a regime could be shown to have already been successful elsewhere - could go a great distance in allaying the fears of the Australian public. Such a compromise would still focus on “super-profits”, and - importantly - would establish a foothold for Labor in establishing the principle of resource rent for the mining sector.

And it is a very important principle to establish: as these non-renewable resources belong to the Australian people as represented by democratically-elected government; and there must be some reasonable kind of premium paid by miners on top of company tax to reflect this.

Calls for Labor to “dump” Kevin Rudd clearly factor into a broader de-stabilisation campaign by the biggest mining bosses and their allies - such as the conservative Opposition which has sold-out the Australian national interest out of sheer opportunism. To replace Rudd now would also set a precedent - that Labor will “dance to the tune” of big business whenever it faces real resistance.

That said, at times, Rudd has looked rattled as if he was entirely unprepared for the scale of resistance he would face in promoting resource-rent reform. Rudd now needs to project an image of being calm and in control.

Prominent political theorist, Christopher Pierson, has considered the dilemmas facing social democrats in great detail. Observing a general trend in social democratic politics, he has written (Pierson, 2001. p57):

… social democratic politics has always been resolutely possibilist or pragmatic.

And:

… being available to fight on another day is almost always preferred to heroically taking the field against the odds.

There are times when commentators, political parties, social movements and NGOs need to be more uncompromising. If everyone always simply focused on the relative political centre, broader political debate would be silenced, and the course of long-term progressive reform stymied. That means there is still a need to talk about things even that are not possible for the time-being.

But following Pierson’s observation Labor, for now, could do to withdraw to a “better defensive position”, adopting the compromise suggested by Colebatch, and selling resource-rent reform on the basis that the same regime has already been implemented successfully elsewhere in the Australian economy. Again, precedent is very important in cementing an aura of credibility in the eyes of the electorate.

There are those in the mining industry who certainly feel that they have been “singled out”, but beyond this there is a genuine case for reform, and that the Australian people truly deserve a share when it comes the natural resources which belong, collectively, to all of them.

The challenge for Labor, though, is to apply these principles fairly and indiscriminately regardless the interests involved, for the principle of distributive justice, to promote a robust and balanced economy and for the collective sake of the Australian people.