Editorial: Rudd’s fall stokes miners’ optimism

The swift and surprising ouster of controversial Australian Prime Minister Kevin Rudd brought with it new hopes for miners that the dreaded Resource Super Profits Tax (RSPT) proposal in Australia can now be renegotiated to a whittled down amount or axed completely.

Faced throughout June with a widely supported and growing caucus revolt, Rudd quickly folded and resigned on June 24 as Labor Party leader and prime minister. He was replaced by Labor colleague and Deputy Prime Minister Julia Gillard, who is now Australia’s first woman prime minister.

Rudd has had a stunning career arc. He took the Labor party to power in spectacular fashion in November 2007 and for a while ranked as perhaps Australia’s most popular prime minister ever.

His first moves in office were applauded by most Australians, though they more gestures than substance: apologizing to Aborigines on behalf of the government for past misdeeds and ratifying the Kyoto Accord.

Rudd was seen as a steady hand on the wheel for Australia during the global economic downturn, which hurt the country far less than most others.

However, Rudd was also the driving force behind what is widely considered a series of policy blunders: setting up an ill-conceived and deadly home-insulation program; sowing confusion with respect to immigration and refugee policies; botching education and healthcare reforms; hiking cigarette taxes; and abandoning a national scheme for rationing carbon emissions and trading carbon credits.

(The latter was actually a correct decision, but it has been deeply resented by Labor’s socialist and environmentalist supporters, and revealed Rudd’s ethical, uh, flexibility in that he so quickly shelved his cap-and-trade policy after having described global warming as “the great moral challenge of our generation.”)

While miners naturally focus on the RSPT proposal, it was only the latest controversy for Rudd, and support for it – at around half of the general population – was not as strong as he had hoped.

A robust, multi-million-dollar anti-RSPT campaign by the mining industry in Australia certainly knocked a few percentage points off Labor’s polling numbers, and helped put in doubt Labor’s return to power as a majority government later this year – something inconceivable less than a year ago.

But more than anything, Rudd was brought down by the disdainful way in which he is widely reported to have treated his cabinet and other political powerbrokers in the country. The Rudd government’s lack of consultation with Aussie miners before announcing the RSPT – as infuriating as it was – was typical of Rudd’s go-it-alone attitude.

New Aussie Prime Minister Gillard is distancing herself a bit from Rudd’s policies, though this needs to be welcomed with some skepticism, as she was a member of the “Gang of Four” inner circle that conceived and executed these policies in the first place.

Gillard says she’s prepared to revisit the RSPT proposal and has thankfully pulled the government’s pro-RSPT advertising campaign, estimated to be costing taxpayers A$38 million. The mining industry has returned the favour by suspending its own anti-tax campaign.

However, Gillard has restated her view that the mining industry has conceded it could pay more taxes, and that this would be the context in which any new negotiations would take place.

So it looks like a truce has been called for now, but the mining tax battle is set to flare up again once Gillard has settled into her powerful new role and new polling can be done.