And both sides are getting desperate. On the weekend each quoted me
The mining giant Rio Tinto has urged its thousands of workers to mount a grass roots campaign against the government’s proposed resources super profits tax.
With tensions between the mining sector and Rudd government at boiling point, Rio Tinto’s managing director, David Peever, has sent all employees a letter urging them to lobby their local MP, write a letter to the newspaper, and even ring talkback radio.
It comes as the government yesterday accused the mining industry of skimping on company tax while running a "fear campaign" and the industry launched an advertising blitz targeting 190 radio stations.
Fortescue Metals chief Andrew Forrest told the ABC he had received a "note from the Chinese consulate" saying Australia's competitive advantage over China, Brazil and India was "now gone".
A spokesman later clarified that the note was not from China but from "an Australian counsel in China". Foreign Minister Stephen Smith said none of his staff had issued such a note...
Mr Peever met the government’s consultative committee last week and left complaining that too little was on the table. Rio, like the rest of the industry, wants to negotiate down the 40 per cent rate, the definition of a super profit and the tax’s retrospectivity.
His email to staff says the process was "flawed" and the parameters "too tight".
It says the company’s executive director, Sam Walsh complained directly to Kevin Rudd, Wayne Swan and the Trade Minister Simon Crean, and urges Rio employees to do their bit.
It directs them to a website that provides tips on how to "actively participate in the debate by contacting your local MP, writing a letter to newspapers or calling talkback radio".
The Minerals Council last night unleashed a radio advertising campaign to run on 190 stations claiming the tax would "make everything more expensive" and cut the value of retirees shares. The tagline for each ad is "I don't think they've thought this through".
Deputy Prime Minister Julia Gillard turned up the heat on the industry claiming Australian-owned mining companies paid an effective tax rate of only 17 per cent and foreign-owned companies only 13 per cent.
By contrast Australian-owned manufacturers paid 25 per cent, retailers 23 per cent and financial corporations 27 per cent.
"The next time the Australian people hear a fear campaign coming at them from the mining sector, they might want to consider those figures," she said.
The Minerals Council chief executive Mitch Hooke hit back claiming the figures came from "a small 2009 American study not commissioned as part of the Henry Review".
Including royalties the mining industry paid 43 per cent.
The government released a list of nine special tax breaks available to the industry including deductions for "black hole expenditure", site rehabilitation, "frontier expenditure" and fuel.
Resources Minister Martin Ferguson said there would be "no movement at all" on the proposed 40 per cent tax rate but held out hope of movement on other details including where the tax cuts in.
"The mining industry has had a great decade," he said. "The companies themselves acknowledged privately to me we should be getting more taxation. We will take our chances electorally and lead by example and make sure we put in place a proper taxation system."
Economist Ross Garnaut appealed for peace labeling the industry campaign "dangerous from a number of points of view".
"Simply to roll the Treasury on an issue that's been subject of very careful analysis without a lot of very careful analysis being the basis of variation of policy, I think would be very dangerous," he told the ABC.
"We need a strong Australian policy making process, we need a strong independent centre of Australian policy making, that's what gave us 20 years of reform and what is the main reason why we're in better shape than most of the world right now."
"To simply have pressure from industry roll this, rather than have a good discussion in the public interest leading to legislation would, I think, be dangerous."
Published in today's SMH
. So what effective tax rates do mining companies actually pay?
. It's not a tax, it applies to more than super profits, so how did so many people get it so wrong?
. Two views of the Resource Super Profits Tax
. Henry to miners: no compromise on where the tax kicks in
. We'll still be mining