Australia: Another fine mess for Kevin Rudd, all of his own making
After waiting more than 6 months for the Henry Tax review to be released by the government, Mr Rudd eventually did so a few weeks back. Of the many suggestions made in the review which was suppose to streamline the Australian Tax system, the government clamped down on one. What was that one you ask? The brilliant idea to tax the “super profits” of the mining industry! Mr Rudd and Co have emptied the tax-payer surplus cupboard from the Liberal era and now are panicking to re-stock it before the next election – so being desperate they decided to hit the soft-target mining sector with a super tax. The result? Shares in the industry have dropped; mining investment and projects have been put on hold and the rest of the mining countries are thanking Mr Rudd for all the new business coming their way. If this isn’t Socialism then I don’t know what is. What Mr Rudd underestimated in his “fair go” wisdom was the reaction from the public, the majority of whom have lambasted the government for their greed and spendthrift ways. Pity I can’t vote yet!
THE charge that the Prime Minister of the country has misled the parliament is serious and not made lightly. Today Kevin Rudd stands so charged.
He’ll argue his way out of it, of course and in the process trash the Westminster system just as badly as he did during the home insulation fiasco. And, as usual it’s the Prime Minister’s intellectual arrogance, and proclivity for hyperbole based on utter self-confidence that has put him in a position where he has misled the House of Representatives.
It’s another fine mess, and as is increasingly common these days, one completely of Rudd’s own making. The issue at the centre of the charge of misleading is the government’s disgraceful decision to spend $38 million of taxpayers’ money belatedly trying to explain its botched attempt to pillage $9 billion from the nation’s miners.
To get to the misleading of the parliament we need to work backwards. Not so far backwards as Chapter 11 of Labor’s 2007 pre-election manifesto, Reforming Government, in which Rudd stated, hand on heart, that “Labor will not support the use of government advertising for political purposes”.
No, we only need to go as far back as Thursday when Tony Abbott asked the Prime Minister if he would now abandon the mining tax. Abbott cited four reasons; “the collapsing dollar, the falling stockmarket, the suspension of projects and the evaporation of jobs”.
It’s the falling stockmarket that concerns us here. In a lengthy answer, Rudd comprehensively rejected Abbott’s assertion that the government’s tax had had any impact on capital markets.
Let’s go the PM’s own words: “This goes to the other point he [Abbott] has made. I quote him from an earlier remark when he said, ‘Our sharemarket is under pressure because the government has totally mismanaged its proposal of a big new tax on mining’.
“Let us go to the facts of this matter. Share prices around the world have fallen because of the crisis in Greece and the honourable Leader of the Opposition would know that. Secondly, within mining itself he is yet to adduce any data to support the proposition. So on proposition No 1 about the dollar, on proposition No 2 about the share price, on proposition No 3 about employment: wrong, wrong, wrong, against all the factual data.”
Unfortunately the following day another piece of “factual data” surfaced in the form of Special Minister of State Joe Ludwig’s statement that he was exempting the government from its own lily white guidelines on taxpayers’ advertising to allow a $38m assault on the mining industry.
Among the reasons specifically cited by Ludwig for the exemption was the following: “I have also accepted the Treasurer’s advice that, as the tax reforms involve changes to the value of some capital assets, they impact on financial markets.”
So, the day after Rudd tells parliament Abbott’s claims the mining tax is affecting financial markets are garbage, his government uses the same rationale to justify rorting its own advertising standards.
But it gets worse. We now know that Swan first canvassed the idea of an advertising exemption based on market impacts at the time of the budget. So Rudd would have known about that justification since May 11. Then he told the parliament the opposite on Thursday.
Moreover, we now also know it was Rudd who approved the precise wording of the Ludwig statement. This column specifically asked the Prime Minister’s office on Saturday if Rudd or anyone in his office cleared Ludwig’s release on government advertising in relation to the mining tax before it was released.
Answer: ” Yes as a courtesy a copy of the release was provided.”
There was also a second question: “Was the issue discussed at any time by the full cabinet or the Strategic and Priorities Review Committee of Cabinet (aka the Gang of Four). If so, was Rudd present for those discussions?
Answer: “As per longstanding practice for both sides of politics we do not discuss cabinet committee deliberations.”
I’m going to take an educated guess here and say that it was the Gang of Four, or part thereof, who signed off on this tax campaign. As my colleague Peter van Onselen reported in the The Weekend Australian, this was a policy conceived in haste and secrecy. This was Rudd and Swan’s doing. Though Swan has been a lot smarter (for that read cautious) in his public pronouncements on the issue.
As for the opposition, they smell Rudd blood. Opposition finance spokesman Andrew Robb said: “On Thursday Rudd got up in the parliament swearing black and blue that his great big new tax on mining was not affecting share prices and this assertion was against all the factual data. To say otherwise he thundered was ‘wrong, wrong, wrong’.
“We now know that on Monday Joe Ludwig approved Wayne Swan’s request for an exemption to Labor’s own rules so the government could launch a $38m advertising blitz against the miners. The clinker is in Ludwig’s Friday press release where he says ‘I have accepted the Treasurer’s advice that as the tax reforms involve changes to the value of some capital assets, they impact on financial markets’.
“There it is in black and white. The Treasurer obviously has long had data which supports the Coalition’s stating of the obvious: that this tax is adversely impacting on the sharemarket and on the superannuation investments of millions of Australians.
“Rudd knew this and therefore it would appear he has clearly and quite deliberately misled the parliament and he must provide a full explanation such is the seriousness of this issue. His government has approved a panicked advertising blitz on the very basis that he said on Thursday did not exist.”
The speed of disintegration in the quality of decision-making in this government is truly astounding. The Labor backbench must be grinding their teeth. Especially when they read reports, as they did in The Australian last week, that Rudd would surround himself with his ministers during the coming campaign to emphasise the depth of Labor talent. Those who remember the 1980 election shudder. A desperate ALP tried to bookend the unpopular Bill Hayden with then extremely popular NSW premier Neville Wran and ACTU president Bob Hawke.
It was a disaster. The Sydney Morning Herald described it as pathetic. “Pathetic because they [campaign ads] amount to a vote of no confidence in Mr Hayden. Their message to the electorate surely is; you may not think our elected Labor leader is up to running the country, but just look who he has got with him.” The answer in 2010: Julia Gillard.