Queensland looks set to turf Rudd out over mining tax

Queensland is a key swing state. If he loses in Queensland he will almost certainly go down overall -- and Queensland is heavily dependant on mining

A BACKLASH against Labor's super mining tax in Kevin Rudd's home state could make him a one-term Prime Minister. A Galaxy Poll - conducted exclusively for The Courier-Mail - warns that, if an election were held today, Mr Rudd would lose in his own backyard.

On the crucial two-party preferred vote, the poll has Labor in Queensland on 48 per cent to the Coalition's 52 per cent. A battleground state, Queensland delivered Mr Rudd victory in 2007 but is home to eight marginal Labor seats.

Galaxy found the proposed super profits tax was fuelling dissatisfaction and the political fallout in Queensland is knocking the sheen off Mr Rudd's once stratospheric personal popularity. It also revealed Mr Rudd is in a virtual dead heat as preferred prime minister with Tony Abbott, and that Labor now trails the Coalition on the question of who would be the better economic manager.

The poll found a majority of Queenslanders opposed the mining tax, including one-third who were strongly against it. Half of all Labor voters polled and two-thirds of Queenslanders thought Mr Rudd and his team had done a bad job explaining how the $9 billion revenue-raiser works.

The mining industry's campaign to scuttle the tax has forced Labor on to the back foot and the fallout over Xstrata's decision to suspend two Queensland projects continues.

The poll shows 80 per cent of Queenslanders – as well as two-thirds of Labor voters – disapprove of taxpayer funds being used to pay for the Government's $38 million advertising campaign to sell the tax.

Galaxy chief executive David Briggs said support for Labor had plummeted in Queensland because of the resources super profits tax: "Not only do the majority of voters oppose this new tax but attempts to rectify the situation through taxpayer-funded advertising is attracting criticism which could make the whole exercise counter-productive."

The poll revealed Labor's primary vote had dropped four points since February, to just 35 per cent, compared to 42.9 per cent at the federal election. If preferences were allocated as per the last election, Labor would lose 2.4 per cent off its two-party preferred vote. Mr Briggs said that, if this swing was repeated across Queensland, the Government would lose many of the seats it picked up three years ago.

The Government - which shepherded Australia through the global economic crisis - is also no longer considered the best party to handle the economy. Labor fell to 42 per cent on this measure, compared to 50 per cent for the Coalition.

Mr Rudd's personal brand also took a hit. Only 39 per cent of voters now think Mr Rudd is in touch with everyday issues, a staggering fall of seven points in the past four months. Fifty-two per cent of those polled said he was more talk than action, up three points.

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Rudd between a lot of rocks and some very hard places

Andrew Bolt summarizes some of the latest reactions to Rudd's mining tax

I don’t think the Rudd Government’s tax - or even the government itself - is going to survive this backlash:

Australia’s resource super profits tax (RSPT) should be redesigned or abandoned, according to Future Fund chairman David Murray...

“Investors are becoming a little bit concerned whether governments will become more desperate and impose things that might...that they might not otherwise have done,” he said.

“For Australia to do this now is not good timing.”

And:

ANZ Banking Corporation Ltd chief executive Mike Smith says the federal government’s proposed resources super profit tax (RSPT) risks sending international investment away from Australia as investors review their assessment of sovereign risk...

And:

ANGLO-SWISS miner Xstrata has shelved spending on two Queensland projects expected to cost a combined $6.6 billion and employ 3250 workers, claiming the Rudd government’s proposed mining tax threatens the survival of all of its North Queensland operations, acquired in the 2004 takeover of MIM Holdings.

And:

Cloncurry Mayor Andrew Daniels says 60 contractors in his town have lost their jobs with Xstrata’s announcement…

Mount Isa chamber of commerce president Brett Peterson says there could be more pain to come.

“I don’t think this will be the last we see of this and the impact is going to be greater and greater for these businesses,” he said.

And:

BHP Billiton is considering tripling the capacity of a revived Indonesian coking coal project that could overtake Queensland projects if the Rudd government’s planned resource super-profits tax goes ahead, Citi analysts say.

And:

ONE of the world’s biggest resource fund managers has sold down a quarter of his BHP Billiton and Rio Tinto holdings because of Kevin Rudd’s proposed 40 per cent tax on mining profits, which he described as a “wake up call"…

“I’m sorry to say we’ve reduced our Australian exposure,” (JPMorgan Chase’s Ian) Mr Henderson told Bloomberg. “It’s been a wake-up call, frankly. I had not thought that the changes in Australia would be quite as drastic as they are proposed to be.”

Anna Bligh turns on Rudd - and his disastrous decision to effectively embezzle $38 million of your money to run Labor ads defending his plan:

...the Queensland Premier stopped short of opposing the mining tax but called on Mr Rudd to urgently negotiate with miners to rework the details of the plan.

“Fighting about a tax system may all be very well in the political sphere, but for those people who got job termination notices today this is no longer a war of words, this is causing real pain to Queensland families,” Ms Bligh said.

“I would urge both the Federal Government and the mining companies to get around the table, to put down the baseball bats, to stop the advertising and get on with solving it.”

And gagging Bob Katter’s attempt to debate the Xstrata decision will hurt Rudd in Queensland:

THE Rudd Government yesterday gagged debate on the suspension of $586 million worth of mining development work in Queensland six times - twice to defeat motions to bring the issue on for discussion and four times to shut up members wanting to argue the point.

Then the Speaker threw out Queensland Independent Bob Katter, who represents a district affected by one of the projects in question.It’s never an attractive look when ministers close down debate.

When it is to argue about mooted losses of 3250 jobs and the shelving of $6.6 billion of potential mining projects, it’s particularly ugly.

Tim Blair is curious: the Rudd Government says it is so urgent to get out its message on its mining tax that it must spend $38 million of your money on advertising. Yet given the chance to get out its message for free in Parliament, it shuts down the debate.

UPDATE

Reader Anthony:

When Rudd said he would stop the boats, he didn’t say he meant bulk-ore carriers.

UPDATE 2

Bryan Firth says Rudd is ignorant to suggest Xstrata is just bluffing:

Rudd initially dismissed the Xstrata statement as “part and parcel” of a tense debate between the mining industry and the government over the RSPT and that he had always expected there would be claims made by miners, including threats of project closure and threats to freeze projects.

If Rudd believes what he said then he is in denial. Xstrata is acting, not just threatening to do so; development work on Wandoan and the Ernest Henry underground projects has ceased.

But Rudd went further… Rudd went on to suggest that other issues may have delayed the development of the project. “It is our understanding that there are a number of other existing issues impacting on this particular development (Wandoan) including rail access, port infrastructure and power supply”.

He seems to be suggesting that Xstrata is not telling the truth or that it was telling half-truths, and therefore is misleading, by omitting to give the full reason. If so that’s a serious accusation and he should be prepared to back it up.

Xstrata’s statement was released to the London Stock Exchange, its home exchange, and was signed off by the auditors and approved by the board. Companies generally take great care in releasing statements to stock exchanges because investors act upon the information disclosed and the directors can be held liable if the information is untrue or misleading.

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Terry McCrann on wind power

Terry McCrann is a veteran Australian financial analyst

Could any rational person—indeed, even gutless half-rational politician—build our energy supply on the total unreliability of so-called wind power.

This is what our total wind `power’ industry across southeastern Australia—NSW, Victoria and South Australia—delivered in one week in May. To all intents and effective purposes: ZERO power…

When the wind don’t blow the power don’t flow. Further, often the wind don’t blow at the same time, right across southeastern Australia… Further wind can go from very high power deliverability to very little in very short time spans.

So you don’t only need installed back-up power almost equivalent to the wind industry, to pick up the slack when it comes, but you need to keep it running, rendering utterly pointless having the wind power anyway.

Despite all the starry-eyed and empty-headed gazing at the power of the sun, wind is the only `practical’ alternative `renewable’ energy `source’ anytime soon.

Almost all our politicians are committed to 20 per cent alternative/renewable energy by 2020. It means a commitment to blackouts and brownouts—quite apart from unnecessarily higher power charges.

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Treasury and CSIRO both have breached trust with climate fraud and tax ignorance, says Terry McCrann

More "hiding the decline" from CSIRO and the supposedly impartial public servant heading up the Treasury Dept. is a political hack

FEDERAL Treasury and the CSIRO are supposed to be among the most trusted institutions in Australia. They are both supposed to be founded in objective rationalism.

The Treasury building in Canberra houses the greatest collection of economic analytical and policymaking brainpower in Australia. The same, in the fields of science, goes for the CSIRO in Melbourne. Together they should form the rock-solid foundation of policymaking in Australia.

We need to be able to trust Treasury to advise the government based on the best possible economic analysis. Arguably its most important task is to deploy its economic heft against usually well-intentioned "good ideas at the time", or failing that to at least limit their damage.

From the CSIRO we need, very simply, good science. As its own strategic plan puts it: "We are committed to scientific excellence and working ethically and with integrity in everything we do."

Both have, in their separate ways, breached that trust. This is a very serious matter for the governance of Australia. If we can't trust Treasury to give us rational economics and we can't trust the CSIRO to give us good, or even just honest, science -- as in both cases they have generally done for a good three-quarters of a century or more -- we are adrift in a sea of irrationalism.

For that, indeed, is what links the two failures: in each case an apparent triumph of theology over reason. First the CSIRO.

In March, it joined with the Bureau of Meteorology to produce a "snapshot of the state of the climate to update Australians about how their climate has changed and what it means". Although the pamphlet had a neutral title, "State of the Climate", it was clearly designed to bring the great weight of the apparent credibility of these two organisations to bear against, and hopefully crush, those pesky climate change sceptics.

But as one of the peskier of them, Tom Quirk -- our version of Canada's even peskier Stephen McIntyre -- discovered, there was a very curious omission in one of the CSIRO graphs. It showed the rise and rise of concentrations in the atmosphere of carbon dioxide and its fellow greenhouse gas methane. It was an almost perfect replica of the infamous (Michael) Mann Hockey Stick. After being virtually stable for 900 years, concentrations of both CO2 and methane went almost vertical through the 20th century. But as the eagle-eyed Quirk noticed and wrote about on Quadrant Online, methane was plotted only up to 1990, while the plots for CO2 continued to 2000.Why so, when the CSIRO measures methane concentrations and has data up to last year?

Did the answer lie in the inconvenient truth that methane concentrations have plateaued since the mid-1990s? Yet here is the CSIRO, the organisation dedicated to scientific truth, pretending -- even stating -- that they're still going up, Climategate style. This is bad enough, but just as with Treasury, real policies are built on this sort of "analysis". The first version of the so-called carbon pollution reduction scheme included farming to address the methane question. But as Quirk has shown in a peer-reviewed paper, atmospheric methane is driven by a combination of volcanos, El Ninos and pipeline (mostly dodgy old Soviet) leakage.

A second curious, and even dodgier, thing happened after Quirk's Quadrant report. CSIRO "updated" its main graph to include the more recent methane data. No admission was made and the graph's scale made it all but invisible and did not show the plateauing. Further, the CSIRO published a more detailed second graph showing what has happened in the past 30 years, as opposed to the first graph's 1000 years. But only for CO2, despite the fact that it had exactly the same data for methane.

In short, the CSIRO is a fully signed-up member of the climate change club. It wanted to project the horror story of continually rising greenhouse gas concentrations in the atmosphere. So it simply disappeared inconvenient evidence to the contrary, in the process announcing it cannot be trusted ever again to deliver objective scientific evidence.

Exactly the same theological, as opposed to ideological, beliefs underpin Treasury's modelling of the government's proposed emissions trading scheme, but it is the proposed resource tax that brings all the troubling elements of a debased Treasury together.

The main criticism of the tax is its total disconnection from reality: that you can scoop away 40 per cent of any profit above the long-term bond rate and it would have no effect on resources investment. That speaks to the bigger problem: the very person who should be bringing a cool, rational analysis to bear on the question has, in the words of the saying, a dog in the fight. Indeed, the dog, because this is not the government's tax; or some external good idea at the time, it is (Treasury head Ken) Henry's tax. His post-budget speech was eyebrow-raising enough, but his performance before Senate estimates was positively CSIRO-like.

Explaining, even defending up to a point, the tax had to be expected, but his diversion into ridiculing the claim that the mining industry had helped the nation avoid recession was disturbing and revealing.

As CommSec's Craig James showed yesterday, he was just plain wrong. According to James, Bureau of Statistics analysis showed that "Industry value added by all industries grew by 6.7 per cent in 2008-09. Had it not been for the growth in the mining sector, value added would have risen just 2.3 per cent in nominal terms: that is, fallen slightly in real terms."

Yet there was Henry, waspishly saying that if every industry had cut labour, as the mining industry had in the first half of last year, our unemployment rate would have increased from 4.6 per cent to 19 per cent in six months.

Does he really not understand that such an extrapolation is meaningless? Does he really not understand how resource export income contributes to the overall economy?

In short and in sum, our two pre-eminent centres of knowledge and public policy analysis across the social and hard sciences spectrum are now literally unbelievable. It is not an attractive or an appropriate state of affairs.

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Sir Lunchalot resigns from NSW government



KRISTINA Keneally lost two ministers in the space of just six hours yesterday as her Government descended into full-blown crisis.

Major Events Minister Ian Macdonald [Sir Lunchalot] resigned from the frontbench after he misled Parliament and the Premier regarding an overseas trip, part of which was a delayed honeymoon. The minister had taken leave, but the taxpayer footed some of the bill.

And Juvenile Justice Minister Graham West stepped down yesterday after he failed to get funding for his portfolio - a slap in the face to the Premier as she marked six months in the job.

Mr Macdonald had told the Premier and the Upper House that he had privately paid for a $2800 airfare to Dubai and Italy but the Opposition came forward with revelations the fare was taxpayer-funded.

Mr Macdonald last night said he was quitting because he had become a "liability" for the Government amid a continuing campaign against him. The minister revealed the trip was his delayed honeymoon, but he had worked for several days in Italy while on leave.

Ms Keneally said last night he had resigned because he had admitted to spending taxpayers funds on his trip to Dubai "without authorisation". She said she was awaiting a report from the director-general of the Department of Premier and Cabinet, due next Wednesday, before she would reveal any details of the unauthor- ised spending. She also said she was "angry" at Mr Macdonald.

Government sources said the inquiry was also looking at accommodation and dinners around the trip - and whether they may have been incorrectly claimed. The question was being asked as to whether dinners were "official" or involved "friends" the source said.

A spokesman for Ms Keneally said the Premier's office had received information on Wednesday "in relation to the minister's trip that made allegations about a third party - not the minister". "It was referred to ICAC that day by the office of the Premier," the spokesman said.

Mr Macdonald claimed last night that he had been hounded out of the job, including by sources within the Labor Party who had leaked details about him to the Opposition. He said he had made a mistake by declaring his $2800 airfare was paid for privately. He said he genuinely believed he had paid for it and also said he had worked for several days in Italy when he was on leave. "I just felt for the Government that it's better that I get out of the way," he said.

He said Ms Keneally had never encouraged him to stand down and it was his own decision. "I think there's no doubt some people have been aiding and abetting the Opposition and keeping up a consistent and incessant attack on me," he said.

Earlier yesterday, Mr West broke down during his speech in Parliament as he expressed frustration at being unable to achieve reforms he wanted.

His resignation came six weeks after he lost a battle in the Cabinet budget committee to get an extra $400 million for his small juvenile justice portfolio for early intervention programs for youth. Sources said Mr West had been monstered at Cabinet budget committee meetings by Treasurer Eric Roozendaal and this had driven him out.

He said he felt he could do more outside the world of "partisan politics" and would vacate his seat of Campbelltown at the March state election. He almost broke down again as he mentioned time he'd had away from his three children. "I want to stay involved in politics but not in the parliamentary system," he said later.

The resignations are badly timed for the Premier - less than a week before the budget. The Cabinet vacancies will be shared among current ministers. Paul McLeay will take on the forestry and mineral resources portfolio.

Mr Roozendaal takes state and regional development and Kevin Greene major events, Barbara Perry juvenile justice and John Robertson is Minister for the Central Coast.

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