TAX NEWS - JUNE 2010

Australia Tax: PM fails to make tax case with ads, despite $38m war chest

A new poll suggests advertisements designed to sell Kevin Rudd's $12 billion mining tax are failing, despite the Prime Minister spending $38 million of taxpayers' money on the campaign.

Polling released yesterday by Essential Research suggests 36 per cent of people find the mining industry ads warning the resource super-profits tax will damage the industry to be more believable than Canberra's ads promoting the 40 per cent tax. Thirty-three per cent of the 1045 respondents found Labor's ads more believable, with 31 per cent unsure.

The polling follows weeks of TV and newspaper ads over the tax, which the mining industry fears will smash investment and cost jobs. However, the government believes the reform is fair and essential and plans to use the money raised to lift spending on superannuation, cut company tax and boost infrastructure.

The polling emerged as Labor seized on an admission by businessman Clive Palmer that he had exaggerated early last month when claiming the resource super-profits tax RSPT had caused him to shelve two major projects in South Australia and Western Australia.

Mr Palmer told ABC TV's Four Corners last night that he was instead slowing down the development projects and "waiting to see what happens".

Small Business Minister Craig Emerson said Mr Palmer's admission exposed the "scare campaign" run by Tony Abbott and parts of the mining industry.

"Clive Palmer, Tony Abbott don't want tax reform," Dr Emerson told reporters in Canberra.

Dr Emerson said Labor would press ahead with the RSPT (resource super-profits tax), aware that tax reform was seldom popular but often vital.

"If a government just sits around, cruising around, only doing what's popular and not prepared to invest in the nation's future through tax reform, then it's letting down the Australian people," he said.

The Opposition Leader said Mr Rudd had wedded himself to the resource super-profits tax RSPT. "We are a successful first-world economy . . . because the resources sector has just gone from strength to strength and this is one large area of the economy where we have a very considerable competitive advantage," Mr Abbott told Melbourne radio station MTR 1377.