American political aficionados love the term "game changer". Julia Gillard's settling of the mining tax issue certainly fits that description in spades.
American political aficionados love the term "game changer".
Julia Gillard's settling of the mining tax issue certainly fits that description in spades.
At one stroke, it has altered the political conversation, removed a serious point of attack on the government, reduced the pressure in some key marginals and put Tony Abbott in an awkward position.
It was, of course, a big backdown. If Kevin Rudd had been around, he either would not have gone as far – although he was on the brink of announcing substantial concessions – or if he had, he'd have been pilloried. But the new prime minister was determined to staunch this wound and if she had to retreat a long way, so be it. She knows much is forgiven from a fresh face. When she executes it, a half U-turn looks like an elegant movement on the ice.
The language has also been changed to reflect the new situation. The "resource super profits tax" has been transformed into a "minerals resource rent tax". "Super profits" tax was always an unfortunate and provocative name.
Gillard's style seems to have been as important in clinching a deal as the actual concessions – even though the negotiations were done by Treasurer Wayne Swan and Resources Minister Martin Ferguson, with the PM ducking in for cameo appearances.
Gillard keeps making implicit but obvious contrasts between her style and that of Rudd, while sensibly refusing to be explicit. She talks a lot about showing "respect". Swan, who had originally been a hardliner on the resource tax, said her intervention "changed the tone" of the negotiations. (For all her renunciations of Rudd she has, however, taken over one of his favourite lines – she is now talking about "sleeves rolled up".)
The tax deal is bad news for Tony Abbott. It's also a reprise, in a different way, of what happened with an earlier "great big new tax". The success of Abbott's campaign against the emissions trading scheme was one factor in Rudd announcing a delay. Rudd's stand did him tremendous damage, but it also reduced Abbott's scope to campaign on the ETS. Then quickly, Abbott had a windfall, when the government announced the mining tax. But now that has been neutralised and most of the miners quieted, what looked like an issue capable of delivering specific seats (because it was localised) is suddenly very "yesterday". Worse for him, Abbott has actually been thrown on the defensive. The opposition still says it will repeal the tax but that is not a very credible line when even the big miners are accepting it.
The tax saga is a case study in pressure group politics and how timing is everything. The miners won $1.5 billion of concessions because they punched hard and the fight came when the government was vulnerable. If they had been having this argument when the government was high in the polls and a year or two – rather than months – out from an election it would have been a different story. Someone asked at Friday's news conference whether this would not simply encourage other groups to try similar arm twisting. It will only work, however, if the circumstances are similar, which is unlikely.
There are losers from the deal – firms that are to get a cut in their company tax rate to 29 per cent instead of 28 per cent. But the loss will be a small one and the losers are spread more widely than the miners are and have a weaker voice and less organisation. Politically, their gripes can be safely ignored by the government.
With mining behind her, Gillard is moving on to strengthening Labor's position on asylum seekers and climate policy. As she says, her approach is methodical. Ironically, she is being helped by quite a few of the Rudd advisers. The Gillard office has taken on many of the former Rudd staff. On one estimate, about half of them are staying. They include Ian Davidoff, a general policy adviser, Ankit Kumar (health) and John O'Mahony (economic policy).
The substantial continuity of staff is just further evidence of the surgical nature of the government's move from Rudd to Gillard. The King is dead, long live the Queen. We know that, at least, there will be far fewer temper tantrums at court.
Michelle Grattan is Age political editor.