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2010-05-31

The Australian on Rudd

Thie following appears to be editorial from The Australian, and is an useful reference for how the media have become disilllusioned with Rudd:
http://www.theaustralian.com.au/news/opinion/another-election-sound-bite-returns-to-haunt-mr-rudd/story-e6frg71x-1225873227899

KEVIN Rudd's double standard in abandoning his own rules on government advertising is self-evident. So blatant and audacious is the backflip that any further commentary would be superfluous. Nor will we take issue with the unfortunate timing that saw the Prime Minister opening an important cancer research facility in NSW on the day that his election campaign claim from 2007- that government advertising was "a long-term cancer on our democracy" - returned to haunt him. That unfortunate coincidence, however, underlines the carelessness of Mr Rudd's choice of words in an otherwise justifiable complaint about the Howard government's extravagant use of taxpayer-funded advertising.



Hyperbole has been a feature of the Rudd government's rhetoric on numerous occasions and, not for the first time, it has come back to haunt it. Two years ago, Mr Rudd branded artist Bill Henson's controversial photographs of naked adolescents "absolutely revolting". He warned of a binge-drinking "epidemic" among the young and, later, condemned people-smugglers as the "vilest form of life", implying that their crimes are worse than serial child molestation or mass murder. The government repeatedly claimed last year that we were "amidst the most savage global recession since the Great Depression." In his Monthly essay on the death of neo-liberalism, Mr Rudd announced that unchecked market forces had brought capitalism to the "precipice", triggering "events of a truly seismic significance, events that mark a turning point between one epoch and the next". And who could forget our "the greatest moral challenge"?

On a crucial and complex issue like the taxation of the mining industry, the government must tone down its rhetoric and clarify its position. The problem with its $38 million television advertising blitz, however, is that it is a belated, desperate attempt to fix something that the government has broken, just as it has broken the pink-batts and school building programs.


Up to a month ago, there was a broad consensus between government and business that resource taxation needed reform. The intellectual case for a profits-based tax to replace state-based royalties was clear. A single tax, collected by Canberra and distributed to the states, would be more efficient. It would be based not on the volume of minerals extracted, but on super profits or rents. Regular profits would continue to be subject to company tax and only those profits deemed to be "rent", that is profit not needed as an incentive for production, would face the RRT. It was and remains a sound proposition that would spread a share of the nation's resources wealth among all citizens and allow the government to lower company tax.


In a sector responsible for more than one-third of Australia's exports, however, the impost should not be punitive or discourage further investment or exploration. Any flight of capital from the Pilbara and Queensland to overseas mining nations would be disastrous.


Some degree of resistance from the mining sector about a new tax was probably inevitable. But the government hampered its cause by failing to identify the pitfalls in the scheme designed by Treasury secretary Ken Henry. The super-profit threshold of 6 per cent was too low when a more realistic level of about 11 per cent would have brought the onshore resources tax broadly into line with the offshore petroleum tax. And the matter was complicated by the ill-conceived notion of underwriting up to 40 per cent of miners' losses.


Such ham-fisted management saw the issue escalate into a divisive debate between the main protagonists as the public looks on nervously. They will not be reassured by Special Minister of State Joe Ludwig's admission on Friday that the changes "affect the value of capital assets and impact on financial markets", an apparent contradiction of Mr Rudd's position.


Throughout the row, the problem with the government's sales pitch has been that the tax needed more thorough consultation and policy work. Now the government is resorting to advertising to salvage public support for the measure, despite Mr Rudd's 2007 promise that he would submit every campaign to the auditor-general. That promise, not written down but delivered to reporters with "my absolute 100 per cent guarantee that that will occur . . . and each one of you here can hold me accountable for that" was a good sound bite on the election trail. The lesson, however, is as old as King Canute. If something is too good to be true, leaders should not promise to deliver it if they want to remain credible.

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