'Betrayed' miners get set for war over tax

MINING companies are planning a damaging new advertising campaign against the government. They have accused Wayne Swan of deliberately misleading them earlier this year over Labor's ill-fated resource super-profits tax.

The miners have moved to a war footing in the belief that the Treasurer and Julia Gillard are reneging on a written agreement about the mineral resources rent tax, which replaced the RSPT days after Kevin Rudd's removal as prime minister.

Mining giants BHP Billiton, Xstrata and Rio Tinto are convinced Labor is preparing to double-cross them a second time by refusing to honour an agreement to offset "all" state royalties as part of the new minerals tax.

And while Mr Swan has emphatically denied misleading anyone about the RSPT, The Weekend Australian can reveal that several government ministers also believe he kept them out of the loop.

Mining tax policy has dogged Labor since Treasury secretary Ken Henry proposed a 40 per cent tax on mining profits in a tax-system review, which was handed to Mr Swan last Christmas Eve. Mr Swan unveiled the RSPT on May 2, infuriating the mining industry, which claimed it had not been adequately consulted before the announcement.

The claims of bad faith against Mr Swan revolve around the assertion that between receiving the Henry report and releasing detailed plans for the RSPT, the Treasurer led colleagues and miners to believe his proposal would not be set in concrete without further consultation. According to cabinet and industry sources, miners were told the tax rate and budget revenue estimates would not be finalised in Mr Swan's response. This, they expected, would have allowed for subsequent negotiations to finalise details.

Instead, Mr Swan revealed on May 2 that the tax would raise $12 billion in its first two years, with the proceeds included in the budget forward estimates to fund a number of measures and help the government return to surplus by 2013.

The mining industry's $17 million advertising campaign against the RSPT contributed to a collapse in public support for Mr Rudd and became a factor in Labor's decision to dump him as leader in favour of Ms Gillard on June 24.

Inquiries by The Weekend Australian have revealed cabinet ministers and mining industry executives believe the ferocity of the miners' RSPT campaign was based on the belief Mr Swan misled the miners and his colleagues.

The ministers now fear the mining companies will launch a second debilitating advertising war as the government works on the details of the more modest MRRT, designed by the Prime Minister to placate the industry after she took over from Mr Rudd. Their fears were confirmed yesterday by mining executives, although Rio Tinto is less pessimistic about the government's intentions than its fellow miners.

Under the terms of the heads of MRRT agreement signed by Ms Gillard and the three big miners, "all state and territory royalties will be creditable against the resources tax liability". Since the federal election, the government has maintained that only those state royalty increases announced or scheduled on May 2 would be creditable under the MRRT, in a bid to avoid Canberra picking up the bill for future royalty rises by the states.

Mr Swan yesterday denied misleading the companies and his colleagues over the RSPT, saying any contrary recollections must be based on "a misunderstanding of our intentions". The Treasurer said: "This was a bruising debate and it comes as no surprise to see all kinds of claims and counter-claims being made about it with the benefit of hindsight." .

But a senior cabinet source told The Weekend Australian the agreement before the RSPT was announced was "there wouldn't be any numbers or forward estimates in the tax plan". Sources say the alleged breach of faith was the reason the mining companies funded their anti-government advertising campaign in June.

They also funded polling that showed Labor's standing had been so damaged by the controversy that it would lose enough seats in the mining states of Queensland and West Australia to lose office in the election.

While government sources have dismissed the claims against Mr Swan as being linked to the MRRT talks, senior ministers have backed the mining industry's accusations. It is understood Resources Minister Martin Ferguson was told early in the year to personally assure his contacts in the mining industry that the RSPT would not be included in budget forward estimates.

Several industry sources have confirmed Mr Ferguson urged miners concerned about the prospect of a new tax to remain silent because they would be given a chance for consultation before the finalisation of the details of the tax. Other miners claim senior Treasury officials gave them the same assurances as Mr Ferguson.

Mr Ferguson was not briefed in full about the finalisation of the tax until a few days before the May 2 announcement and was angry that he had been inadvertently misleading the industry. Despite this, another senior government source expressed surprise that any minister "in the loop" could have been in any doubt about Mr Swan's intentions about the RSPT.

It was discussed in detail, including its revenue estimates, by Mr Rudd's kitchen cabinet - comprising Mr Swan, Ms Gillard and then finance minister Lindsay Tanner.

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Canadian superbug detected in NSW public hospitals

THE first cases of a bacterial strain linked to severe illness and deaths overseas have been detected in NSW, prompting calls for increased surveillance and testing of patients across Australia.

The 027 strain of the bacteria clostridium difficile, which causes severe diarrhoea and killed up to 89 people in a 2003 outbreak in Quebec, Canada, has been found in samples from 22 people treated in northern Sydney hospitals in a two-year period, the Health Department confirmed yesterday. Two were still in hospital, for unrelated conditions, while the others were being contacted, a NSW Health spokeswoman said.

The superbug - which forms spores that can survive in hospitals even when the infected patient is no longer there - was identified after samples taken at the time of the patients' illness were re-analysed using a new genetic test to distinguish the deadly strain.

Lyn Gilbert, the chairwoman of the NSW Health Expert Advisory Committee on Health Care Associated Infections, said it was likely the bacteria had first been brought to Sydney by someone who had travelled overseas, "and there's been a low-grade level of spread which has not been [previously] recognised", which had remained confined to northern Sydney.

No samples from Professor Gilbert's own laboratory, at Westmead Hospital, had tested positive, she said, even though other hospitals send samples there for advanced testing if they suspect the patient may carry the 027 strain - linked to an outbreak and one death in Melbourne in April.

NSW Health guidelines say all patients who develop diarrhoea in hospital should be tested for c. difficile. But Professor Gilbert said more formal surveillance was now warranted. "We need to be counting cases," she said, and authorities should consider adding the infection to the national notifiable diseases list.

Professor Gilbert said no Sydney patients - treated at Mona Vale, Manly, Ryde, Royal North Shore and Greenwich hospitals - had apparently suffered severe complications, and it was possible the bacteria was evolving to become less virulent.

Tom Gottlieb, president of the Australasian Society for Infectious Diseases, said the 027 strain had been "a long time coming. We're surprised it's not come sooner."

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Thanks to Tony Abbott, we don't need a Tea Party

Christopher Pearson

Australia's conservative Coalition appeals more effectively to blue-collar social conservatives than the U.S. Republicans do

MOST of the commentary on contemporary US politics published in the Australian press has a pronounced left-liberal bias. It's hard to think of an account of the Tea Party, for example, where the author is primarily concerned to understand the phenomenon rather than to register Olympian disdain about it.

This year The American Spectator featured a remarkable essay by Angelo Codevilla on "America's ruling class - and the perils of revolution" . Its main interest is as a corrective to all the PC attitudinising that passes for analysis. As well, for Australian readers, it provides a useful prism through which to view Tony Abbott's prospects in the continuing campaign.

Codevilla's starting point is the high level of cross-party support for Barack Obama's initial $US700 billion rescue package and the eventual commitment of about 10 trillion nonexistent dollars. The cognoscenti had no qualms about this unprecedented expenditure, but he tells us the US public objected immediately by margins of three or four to one.

"When this majority discovered that virtually no one in a position of power in either party or with a national voice would take their objections seriously, that decisions about their money were being made in bipartisan backroom deals with interested parties, and that the laws on these matters were being voted by people who had not read them, the term 'political class' came into use. Then, after those in power changed their plans from buying toxic assets to buying up equity in banks and major industries but refused to explain why, when they reasserted their right to decide ad hoc on these and so many other matters, supposing them to be beyond the general public's understanding, the US people started referring to those in and around government as the 'ruling class'. And in fact Republican and Democratic office-holders and their retinues show a similar presumption to dominate and fewer differences in tastes, habits, opinions, and sources of income among one another than between both and the rest of the country. They think, look, and act as a 'class'."

According to Codevilla: "Differences between Bushes, Clintons, and Obamas are of degree, not kind. Moreover, [in] 2009-10 establishment Republicans sought only to modify the government's agenda while showing eagerness to join the Democrats in new grand schemes, if only they were allowed to. Senator Orrin Hatch continued dreaming of being Ted Kennedy, while Lindsey Graham set aside what is true or false about 'global warming' for the sake of getting on the right side of history. No prominent Republican challenged the ruling class's continued claim of superior insight, nor its denigration of the American people as irritable children who must learn their place. The Republican Party did not disparage the ruling class, because most of its officials are or would like to be part of it."

He thinks sociological factors account for what he sees as the unparalleled lack of diversity within America's dominant elite. "Today's ruling class, from Boston to San Diego, was formed by an educational system that exposed them to the same ideas and gave them remarkably uniform guidance, as well as tastes and habits. These amount to a social canon of judgments about good and evil, complete with secular sacred history, sins (against minorities and the environment), and saints. Using the right words and avoiding the wrong ones when referring to such matters - speaking the 'in' language - serves as a badge of identity."

The latent heat and energy of the Tea Party is best understood in terms of the US's asymmetrical political representation. The self-styled progressives can expect more of their agenda to be delivered by Democrats. Conservatives of any hue can hope for little satisfaction from anyone other than mavericks. "In short, the ruling class has a party, the Democrats. But some two-thirds of Americans - a few Democratic voters, most Republican voters, and all independents - lack a vehicle in electoral politics."

Codevilla calls the excluded majority "the country class" and makes the point that as a class it's hard to describe because it's so heterogeneous.

"It has no privileged podiums, and speaks with many voices, often inharmonious. It shares above all the desire to be rid of rulers it regards [as] inept and haughty. It defines itself practically in terms of reflexive reaction against the rulers' defining ideas and proclivities - ever higher taxes and expanding government, subsidising political favourites, social engineering, approval of abortion. Many want to restore a way of life largely superseded. Demographically, the country class is the other side of the ruling class's coin: its most distinguishing characteristics are marriage, children, and religious practice."

Whether such a diverse grouping can hope to construct the common cause and congruent agendas it needs to make headway against America's ruling class is a vexed question. But the parallels with Australian politics are as instructive as the differences. It's worth noting, for example, that comparisons in local media between the Tea Party and Hansonism are misleading, because the former can't be described as racist and the latter's agenda was secularist.

Thankfully, Australia is unlikely to have a movement like the Tea Party in the foreseeable future. The main reason is obvious. While Labor seems hell-bent on tearing itself apart over progressivist issues such as gay marriage and a carbon tax, which have no appeal to its traditional support base, candidates in the parties of the centre-right tend to understand the values of their electors and take them seriously.

The drift of socially conservative blue-collar votes to the Coalition, for most of the Howard years and at this year's federal election, is suggestive.

It tells us that when voting is compulsory people will ignore the tribal claims of party and vote for whoever seems to them to represent most closely their values and aspirations. It also tells us that the Liberals have managed to shake the perception that they're the party of big business, at a time when state and federal Labor's links with the big end of town and with property developers are damaging the party.

While the wet end of the Liberal Party in some ways resembles the Republicans, Abbott's approach to greenhouse gas emissions has made him a pin-up boy in conservative America; a reminder that leaders of mainstream parties in developed countries don't have to be captive to the bien pensant. His support for lower taxes, smaller government, vouchers in education and family-friendly policy reinforce the point.

No doubt that's why Arthur Sinodinos, in his opinion pieces in The Australian, has taken to referring to Abbott as Spartacus and likening the Coalition's resurgence to "the revolt of the slaves".

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Doctor wins 21-year fight to build private hospital

A truly virulent NSW health bureaucracy -- and they are not repentant either

THE medical entrepreneur contracted to build a private hospital on the grounds of Royal Prince Alfred has said the project will go ahead - more than two decades after it was announced.

Thomas Wenkart won a mammoth legal battle this week against South West Sydney Area Health Service, giving him the right to take back the construction site and car park from which he was evicted in March 2000.

The Court of Appeal found not only was Dr Wenkart's Macquarie International Health Clinic wrongfully locked out of the Camperdown sites but the contract to build a $150 million, 200-bed private hospital and multistorey car park - signed in 1989 - was still binding.

Dr Wenkart has written to the Minister for Health, Carmel Tebbutt, asking that she "become involved in assisting in having the project move forward".

The former business partner of the disgraced doctor Geoffrey Edelsten says the hospital was not built by the original December 1999 deadline because private health insurance was at a record low of 30 per cent, rendering the project uneconomical.

But federal support of private health insurance through tax incentives and rebates meant demand was now high for a profit-making hospital on the public campus, said Dr Wenkart, who owns five small hospitals from Dee Why to Kirrawee and is an executive director of six others.

"I'm enthusiastic about developing a hospital that's relevant for today," he said. "There's no doubt there will be an appetite as the public system continues to fail, and the ageing population has given us a big boost."

The story of Prince Alfred Private Hospital is one of the more bizarre and wasteful episodes in a history of health management tardiness in NSW. Dr Wenkart told the Herald in 1992 that hospital would be "up and running by the end of 1994".

In the years since, several plans have been drawn, countless meetings held, a scathing Ombudsman's report released and millions of dollars spent on legal fees.

Yet the highly regarded Royal Prince Alfred teaching hospital of Australia's oldest medical school, Sydney University, is the only major public hospital in Sydney without an adjacent private one.

The two hectares of cleared land behind the decommissioned King George V Memorial Hospital are an overgrown block used as a car park. Both sides were prevented from developing the site until legal action was finished.

Dr Wenkart is suing the area health service for tens of millions of dollars, as well as his legal costs, which he estimates at $3.5 million.

But the chief executive of the area health service, Mike Wallace, said it would strongly contest any claim for damages and is seeking legal advice on an appeal to the High Court. Mr Wallace said a private hospital on the grounds was still wanted, even with construction of the state-of-the-art Chris O'Brien Lifehouse cancer centre set to begin next year.

But Dr Wenkart has told Ms Tebbutt he is not willing to negotiate with Mr Wallace. Along with the then chief executive Diana Horvath, the court found Mr Wallace breached their agreement by failing to tell Macquarie that it had abandoned its masterplan, Campus 2010, which envisaged closing Missenden Road and having private and public hospital buildings.

Although Macquarie missed construction "drop dead" dates in 1999, the leases and construction deed were not validly terminated by the area health service and remained in force, the appeal judges said.

Dr Wenkart said: "It's going to take time, but then I've already spent a third of my life on it."

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Rising tide of boat-borne illegals in Australia

PEOPLE arriving by boat now account for nearly half of the foreigners seeking asylum in Australia.

The Department of Immigration yesterday released figures showing the proportion of boat people jumped from 16 per cent two years ago to 47 per cent of the asylum seekers last year.

The majority of asylum seekers still remains those who arrive by air with a temporary visa and subsequently seek to stay permanently on grounds of persecution if they return to their homeland.

The department revealed the latest trend after WikiLeaks disclosed that the American embassy had criticised Australia's focus on boat people when there were thousands of other non-citizen overstayers already in Australia.

The Immigration Department's latest annual report does not list overstayers in its index, although the department reported in 2005 that there were an estimated 47,800 overstayers in Australia.

According to the department yesterday, non-boat-people asylum seekers totalled 5978 in 2009-10, significantly up from 5,074 in the previous 12 months.

However, that was outstripped by the massive rise in boatpeople, up from 2726 last year to 6232 boat people so far this calendar year.

Overall, asylum seekers appear to have had a better chance of winning refuge in Australia in recent years, although boat people have a lower success rate than those who arrive by air.

The better prospects may reflect the introduction by the Labor government of independent panels to review departmental decisions.

People from Afghanistan were the most like to win asylum, with a success rate of 99 per cent, followed by Iran (98 per cent) and and Iraq (97 per cent).

People from China have applied in the highest numbers for asylum, but have been the least successful. Out of a total 1288 Chinese applications for asylum last financial year, just 31 per cent succeeded.

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