TAX NEWS - June 2010

Australia Tax: Kevin Rudd told he has two weeks to fix mining tax

Labor figures and the mining industry have given Kevin Rudd two weeks to settle the damaging dispute over the resource super-profits tax as the ALP faces a call to dump the Prime Minister before the election.

Mr Rudd has rejected calls for an early settlement of the deep differences over the proposed $12 billion tax and warned that the fight could last for months, through to the election.

Former Queensland Labor treasurer Keith De Lacy has urged federal MPs to replace Mr Rudd as leader or risk being swept from power for a generation.

Mr De Lacy savaged the Prime Minister as "an item of ridicule", as former party powerbroker Graham Richardson warned that Labor was "bleeding votes" because of the Prime Minister's planned 40 per cent tax on "super profits".

A Westpoll to be published in Western Australia today, after Mr Rudd and the cabinet spent two days in Perth and promised $2bn would be spent on infrastructure in the resources state, shows Labor's primary vote in the state at 26 per cent - the lowest ever - and the Coalition holding a two-party-preferred lead of 68 per cent to 32 per cent.

If such a result were duplicated at an election, Labor would not have a West Australian member of the House of Representatives.

Mr De Lacy, now a coalmining executive, who worked with Mr Rudd when the Prime Minister was Queensland's top bureaucrat under premier Wayne Goss, said: "Labor now run the risk of being out of power for a generation.

"I regret to say there is no alternative but to change the leader - for someone who cares about Australia and cares about the long-term electability of the Labor Party. There are plenty of them around. But I reckon there is little time to waste."

Mr Richardson told Sky News that Mr Rudd must resolve the details of the proposed tax within a fortnight to stand a chance in the federal election, expected in September or October.

Mr Rudd's handling of political issues is even questioned by his brother, Greg, in an article in today's Weekend Australian.

While Greg Rudd attacks the media for attempting to tear down his brother, he admits it is hard to say whether the Prime Minister has made Australia a better place because of the "smoky haze of self-lit spot fires of distraction".

Their comments came after The Australian revealed that Hawke government minister Peter Walsh had joined the critics of Mr Rudd's lack of consultation with the mining industry.

Mr Walsh, who as Resources Minister in 1984 introduced the petroleum resource rent tax on which the new levy is based, said the Rudd government should have followed the same consultation process before the PRRT was announced.

"But there's an obstacle to that, and that obstacle is Kevin Rudd," Mr Walsh said.

The mining industry stepped up its demands for genuine negotiations with the government after expectations of a sudden breakthrough in Canberra were dashed yesterday and the Minerals Council of Australia expanded its advertising campaign against the new mining tax.

Xstrata Coal chief executive Peter Freyberg said last night that talks between miners and federal Resources Minister Martin Ferguson in Canberra did not make progress. He said Mr Rudd needed to start genuine negotiations "as soon as possible".