Hogsback and the return of the mining tax

IF YOU like scary movies Hogsback suggests you get ready for Mining Tax, The Sequel.

Staff Reporter

Auditioning for the lead roles has started with the Prime Minister Tony Abbott playing the role of the mining industry’s defender, and Opposition Leader Bill Shorten playing the role of Taxman.

There’s no point in discussing the script, because it will be the same as that used in the original version when former PMs Kevin Rudd and Julia Gillard tried to whack the mining industry with punitive special taxes.

If there is a difference in the mining tax sequel it lies in the fact that more people can see the problem with singling out the most important sector of the Australian economy for special tax treatment – which is why Abbott rather than Shorten has fired the first shots.

What Abbott did last week was use the opening of a new coal mine in Queensland to stamp the authority of his office on the entire Australian mining industry.

“Good for humanity, prosperity and our economic future,” is what the pro-mining prime minister said at the opening of the BMA Alliance’s $4.5 billion Caval Ridge mine.

For everyone working in the Australian coal industry it was an overdue confidence boost delivered at the same time that negatives forces were inflicting more pain, including fresh moves by China to protect its domestic coal mines, and a bizarre move by the Australian National University to sell shares in companies it regards as socially irresponsible.

China’s imposition of a special tariff on imported coal is more damaging than the ANU move which has been widely condemned by most Australians, except the loony greens.

Abbott’s comments at the Caval Ridge opening will have sent a clear signal to the ANU and others campaigning against coal and other forms of resource development.

Mining, he effectively said, is one of Australia’s few world-class industries and to try and drive it out of business risks wrecking the country’s economic foundations – which is about as socially irresponsible as you can get.

Here’s a bit more of what Abbott had to say: “Energy is what sustains prosperity and coal is the world’s principle energy source and it will be so for many decades to come. Let’s have no demonisation of coal.”

Less clear was the position of Shorten who seemed to be supporting the mining industry but has also hinted that a fresh attempt would be made to introduce a carbon tax, and a revised version of the mining tax is being drafted in the background.

The devil, as always, will be in the detail and the problem with modern politics is that the preferred method of attack is to leave the detail until the last minute to give critics the minimum about of time to analyse and comment.

That’s why Abbott’s full-blooded support of coal mining, and the wider mining industry, is so important because what he has done his align his government with mining, leaving it up to Shorten to either do the same, or be seen as a man plotting an election surprise for mining.

As one of The Hog’ colleagues remarked in the Australian Financial Review after Abbott’s comments at Caval Ridge: “Politics has reached a crossroads. From now until the next election, Labor will be painted as the enemy of coal by the government, and possibly, an anxious minerals sector.”

It would be pleasing to say that those harsh words are incorrect and that the Labor Party has learned its lesson after the ill-fated attacks on mining during the Rudd/Gillard years.

Sadly, that can’t be said because there seems to be little doubt that a fresh carbon attack is on the way and that plans are being drawn up for what is quietly being described as a “profits-based tax on minerals”

Precisely what is meant by that description is left up to the readers’ imagination but it’s a fair bet that the anti-mining gang in Canberra might be the last people in Australia to believe that the mining boom is alive and well and that mining is a ripe plum ready for the picking.

Abbott knows that mining, especially coal and iron ore, are under enormous price pressure and that the last thing it needs is talk of a new tax, or a revised version of the failed mining and carbon taxes.

Hopefully, Abbott is on a winner but as The Hog considers what happened at Caval Ridge, and the ANU’s bizarre divestment decision, he reckons that a script for a sequel to the Rudd/Gillard horror movie is already being drafted in a back-room somewhere in Canberra.

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