TAXING TIMES

David Lipson, Sky News Political Reporter

5 June 2010

I'm in a cab in the dead of night in Canberra. There's no frost on the ground, but it sure feels like it.

The taxi slides through the blackness, making gigantic arcs through this strange, circular city.

Then I catch a glimpse of that enormous bunker through the trees, lit-up on a hill, with its four pronged flag-poll thrusting a flapping southern cross high into the milky-way.... My new office. (Parliament House, not the galaxy!)

It's such an imposing building. Beautiful in it's sleek simplicity, but with an edge of brutal toughness as well. It certainly feels the latter when I realise I have less than an hour to quickly gather my composure, my thoughts and the many thousand printed words into a two minute "hit" for the 6am news... my first political report from Canberra.

Before I know it, I'm trying to look calm as I stare into a robotic camera and hear the words in my earpiece: "And joining me now from Canberra..."

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It's been a big week, dominated by the battle over the mining tax. There's a lot at stake for all parties.

Although somewhat damaging for Kevin Rudd, this is actually the big fight he'd been hoping for in the lead up to the election. Health turned out to be a fizzer. ETS was considered unwinable (though the monumental backflip has perhaps inflicted greater damage). Despite all the exasperation and hyperbole from both sides, the mining biffo has at least given the PM a theater to show the Australian people he's no jelly-back. He'll fight for what's right! (whether it's right or wrong) He knows, at the very least, he has to use this tax brawl as a platform to counter the image that's been gathering strength, that he's not a man who sticks to his convictions. Problem here is, there's mounting evidence the super-profits tax has been badly drawn up and the process should be reset. Seems like it's too late for that now.

For Tony Abbott the mining tax is an all important point of difference. Vote for the Coalition and he'll scrap the tax. And for now, voters seem to be backing his point of view, that RSPT is a bad idea. More importantly it's handed Tony Abbott a rich and powerful ally, in the form of the mining lobby, who'll join the Coalition trenches in the battle against the government and shovel millions of dollars into advertising campaigns to get the opposition leader elected. Just look at Workchoices and the Unions role in the 2007 election for a reminder of how crucial that sort of support can be.

The miners have a lot at stake too. They cry blue murder about the tax and the impact it's going to have in Australia. Existing mines will become unviable. Plans for potential mines will be thrown on the scrapheap. Foreign investment will be driven off-shore. But all this fear mongering from the big-digging companies mask a greater threat to their industry. Their real worries lie overseas. Because, when these miners try to convince other nations, especially developing countries like PNG, Brazil and Mongolia, to hand over their natural resources, they point to Australia as a model of what is fair an appropriate, when it comes to taxes and royalties. The real fear for the miners is that these countries will follow Australia's lead and impose their own version of the 40% super profits tax. That would be a real worry to their bottom lines.

Wayne Swan gave it away with a wry smile when asked whether there were any governments from other countries that had approached him for advice about the details of the tax. "Not as yet" he said "But I imagine there will be."

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