Friday, 2 July 2010

Federal dominance strengthens


There is one difference in what is now to be called the Minerals Resources Rent Tax — the Commonwealth Government has now crashed into one of the few areas that was left where State Governments raised a significant amount of the money they spent.
The iron ore and coal industries will now pay a share of their profits as a royalty on what they dig out of the ground rather than a fixed rate per ton. That is, of course, if the new tax ever becomes law. Just because there is now a basic agreement between a Government and a section of an industry does not ensure that it will.
The gauntlet of getting a bill through the Senate, where neither Labor nor Coalition will have a majority after the coming election, remains. Only when Bob Brown and his Greens become a party to an agreement is there actually an agreement at all.
Not that Prime Minister Julia Gillard is the slightest bit concerned about that. For her this whole question of taxing mining profits was something she wanted to be able to pretend was settled. Retaining power is virtually the only thing she and the Caucus members who put her in the job have on their minds.
As I have written many times, if the first duty of a politician is to win office then the second is to retain it. Kevin Rudd was sacked as Labor Leader because he had become politically vulnerable to a charge of not standing for anything. His colleagues deemed that the back-flip Gillard has presided over would have been fatal to him and thus them.
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