Rudd’s mistake is to race Abbott to the right

Rudd’s personal popularity has taken another dive—running the danger of letting the Liberals back into the election race. But he has only himself to blame. After the last few weeks, less and less people believe that Rudd stands for anything. He is becoming famous for changing his mind, and dumping his promises of change in order to outflank Abbott from the right.
The failure to bring real change was responsible for British Labour’s recent general election loss. That should stand as a warning to Rudd (see page 15).
First was his pathetic capitulation to Abbott’s racist campaign against refugees. Rudd’s freeze on new refugee visas meant throwing away Labor’s promise to run a more humane refugee policy. He has torn up the “detention values” meant to guide the use of mandatory detention. Many asylum seekers will be in limbo for six months no matter what their personal situation, and the Howard-era Curtin detention centre, in the middle of the desert 28 hours by road from Perth, is to be reopened.
Conceding the argument to Abbott that we need tough measures against boat people has only given him confidence. As the Liberals new racist TV ad shows they are looking to capitalise on the issue.
Then Rudd junked his CPRS—after telling us climate change was the “moral challenge of our generation” for over a year. The CPRS itself was hopelessly compromised—based on a useless emissions trading mechanism and bloated with cash handouts and compensation for the biggest polluters.
But many of those who voted for Rudd thought he was serious about acting on climate change. The CPRS gave Rudd the appearance of doing something. Then, as soon as it was no longer politically convenient—with Abbott making ground by labelling it a “great big new tax”—Rudd dumped the issue. Now the government will delay action until 2013 (see page 7).

Slugging mining bosses?Rudd's new super profits tax on mining would be a popular way to fund services, but instead most of it is going straight back to business
So Rudd has tried to refocus political debate. He managed to get an agreement with most of the states for his hospital reform plan. Now he has announced a populist tax hike on the big mining companies.
The mining bosses are fuming at the plan for a new “super profits tax”. Much of the media has bought into their ridiculous claims about loss of mining investment and jobs, like the claim by Business Spectator that, “Australia is on the brink of the greatest capital strike in its history”.
In reality mining companies are swimming in money. Rio Tinto posted a 33 per cent rise in profit last year, making close to $5 billion, while BHP Billiton made $6.5 billion in the last six months of 2009 alone. The price of commodities like iron ore and coal has been surging.
The tax take from the minerals sector as a proportion of profits has fallen by about three quarters over the last ten years, according to the Henry tax review. Because of the way mining taxes are imposed, this has meant companies have avoided $35 billion tax over the last decade.
Yet in reality, Rudd’s efforts to boost corporate tax are extremely timid. While mining tax will go up, the overall rate of company tax is to be cut to 28 per cent from the current 30 per cent. And there are plenty of sweeteners for the mining sector to offset the new tax. They will be able to claim rebates for money spent on exploration and investment and the federal government will give them tax credits to cover royalties charged by state governments. In addition one third of the money raised by the new tax will go into an infrastructure fund, where resource-related infrastructure projects will get priority. This means the federal government paying for more coal loaders, port expansions and mining rail upgrades.
Once the changes are all introduced, of the $9 billion extra in tax a year collected, about one third will be handed straight back to business in tax cuts, and another third will be spent mostly on mining-related infrastructure. Business may end up with an even better deal, with Rudd signalling a willingness to consult on how to introduce the new mining tax.
Rudd should have gone much further. We need a program of serious government spending on renewable energy to phase out coal power and create new green jobs—but Rudd is proposing a maximum of $2.2 billion over six years on solar power.
Despite talk of “the most substantial renewable energy plan this country has seen” in Wayne Swan’s Budget speech, he only came up with $652.5 million over four years. This is the exact sum saved by not having to administer the CPRS. Rudd should also be reversing the Howard-era cuts to universities and upping investment in health further.
But once again, Rudd is not serious about taxing the rich to fund renewable energy and services. His mining tax is a hollow political stunt. It is not surprise that early polls found it unpopular.
When Rudd stands for nothing, it only helps the Liberals. It gives people no reason to vote for him, and opens a space for Abbott to drag political debate to the right.
The only way to force Labor to stand for something is for climate campaigners, anti-racist activists and unionists to mobilise to demand change. If we sit back, we only let Abbott set the agenda.


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