08/07/2010 - 00:00

Miners’ influence vital in Rudd’s demise

08/07/2010 - 00:00


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As the overthrow of Kevin Rudd shows, modern politics is all about winning, and then consolidating, power.

IT’S helpful to step back somewhat from the complex accounting details of the federal government’s revamped mining tax and ponder just how the modus operandi of former prime minister, Kevin Rudd, so quickly transformed Australian politics.

Although big business – most especially international mining giants BHP Billiton, Rio Tinto and Xstrata – may not view it thus, they were crucial in terminating Mr Rudd’s prime ministership.

Who’d have thought a few weeks back that he’d be prime minister for not much more than two-and-a-half years; not even a quarter of his predecessor, John Howard’s, unbroken 11-year term?

Mr Rudd, like kitchen cabinet luminaries, new prime minister, Julia Gillard, and her deputy and treasurer, Wayne Swan, was always on the lookout to move from the era of big government to a new era of super-government, so there was an ever greater need for tax dollars.

That’s why Australia’s buoyant and expanding mining sector was so promptly targeted for so-called super-profits.

How did the big three respond?

They helped ignite the concerted advertising campaign that struck a chord with so many Australians, that steamrolled Mr Rudd out of the Lodge and Kirribilli House in less than a month.

The only precedent State Scene recalls for this unexpected response is the 1949 election when Australia’s banks combined with the then newly-formed Liberal Party, headed by Robert Menzies, a partnership that launched Labor into the wilderness for 23 years.

Although one shouldn’t downplay the impact upon Labor and its then leader, Ben Chifley, of the 1949 defeat, it doesn’t quite match the short-lived but devastating multi-million dollar mining industry advertising blitz.

Why? Because Mr Chifley remained leader and even went on to fight the tough 1951 double dissolution election. Furthermore, he was replaced only because he died a few months after that contest.

And his successor, Bert Evatt, led Labor at the losing 1954, 1955 and 1958 elections.

Moreover, Dr Evatt’s successor, Arthur Calwell, also led Labor into three losing elections – 1961, 1963 and 1966.

Not only did Labor stick by losing leaders – Chifley, Evatt and Calwell – over the 1950s and 1960s, but the tradition persisted into the 1970s.

Mr Calwell’s successor, Gough Whitlam, after being badly trounced in December 1975, remained leader for the 1977 election.

It was only after he lost that one – one less than Messrs Evatt and Calwell – that he finally farewelled politics.

Compare that to the torrid ordeal of Mr Rudd.

Is it any wonder that his successor, Ms Gillard, so promptly directed Mr Swan and Resources Minister Martin Ferguson to meet representatives of the ‘Big Three’ to knuckle out a deal that preserves the skeleton of a mining super-tax but one markedly watered down?

Future Labor leaders are unlikely to get big business so far offside, especially on tax questions. And quite understandably, since Labor leaders, unlike those past, are now far less immune to being dumped.

Clearly, Australia’s May-June 2010 mining tax imbroglio is far more of a turning point in big business and ever-bigger government relations than Labor’s post-war bank nationalisation attempt.

The fact that Mr Rudd portrayed BHP and Rio as largely foreign-owned entities only added more bitterness to the imbroglio.

To top matters off, those heading up the big three are all foreign born – BHP and Xstrata’s chiefs, Marius Kloppers and Mick Davis respectively, hail from South Africa, while Rio boss Tom Albanese is American.

Notwithstanding that each spoke candidly and unambiguously against the Resource Super Profits Tax proposal, from which the government has now retreated.

“This is the biggest assault on the mining industry I have witnessed in my now long involvement in the sector,” Mr Davis said.

“I’ve been to Japan, Canada, I’ve been through Europe, I’ve been in the United States and I’ve been in China. And they’re all asking me ‘what the heck has happened in Australia’?” Mr Albanese said.

“I have been through two Brazilian crises and the Asian crisis and this is by far the biggest issue I have seen by an order of magnitude,” Mr Kloppers said.

Why Mr Rudd didn’t name Xstrata during his blitzing of BHP and Rio is a mystery, since it’s listed on the London and Swiss Stock Exchanges and is headquartered in that swish Swiss canton of Zug. Moreover, one of its biggest shareholders is Glencore, the former Marc Rich & Co AG.

Mr Rich, for those who monitored the Bill Clinton years, was indicted in the US on federal charge of illegally making oil deals with Iran during the late 1970s-early 1980s Iran hostage crisis and tax evasion.

He went on to gain a presidential pardon from President Clinton on his last day in the White House.

As someone who recalls many of the conspiracy theories pedalled by leftists for years thereafter regarding alleged CIA involvement in the removal of Mr Whitlam in 1975, State Scene is naturally curious whether similar tales emerge about international capitalism being responsible for the Rudd demise.

Whether or not there’s certainly plenty of raw data for myriad complicated theories.

Little wonder a key architect of those devastating anti-mining tax advertisements, Minerals Council of Australia chief Mitch Hooke, was prompted to try to distance miners from the likelihood of becoming entangled within such theories.

“We stick rigidly to policy and not politics,” he told The Australian Financial Review.

“We don’t try to pick the political landscape. We just stay absolutely and utterly on the policy.”

But maybe the beginnings of understandable contradictions have begun to blossom.

Arguably Australia’s most influential leftist columnist, ABC Late Night Live commentator, Phillip Adams, has already fired an early shot in that direction.

In a recent column he wrote: “For 35-years the ALP has protested the Kerr coup – ululating over the vice-regal regime change that deposed Whitlam. The Dismissal?

“Factional thugs now dismiss leaders at their whim. In cowardly conspiracies.

“First, a rapid succession of NSW premiers. Now a Labor prime minister ... The assassination of Rudd makes a final decision easy. After 50 years of [Labor Party] membership, I’m resigning.”

Mr Adams is only a short hop from someone eventually linking those who engineered the “cowardly conspiracies” being associated with big capital.

Unlike those fanciful CIA Whitlam dismissal yarns there’s certainly material aplenty to help cement such a view for decades to come that Mr Rudd was a victim of big capital being so promptly made available by big miners.

Labor in the 1950s, 1960s and even 1970s had a stomach for class warfare and believed in long-term loyalty to its leaders.

That type of class tribalism doesn’t exist in the 21st century. Winning elections is now the pre-eminent consideration.

It’s shape up in the polls, or just ship out.

Like Mr Rudd, onetime NSW premier Morris Iemma, was deposed by his faction, though without an advertising campaign being the catalyst. He was succeeded by leftist, Nathan Rees, who’d only been in parliament 18 months.

The Iemma coup of September 2008 was followed 14 months later with Mr Rees’ axing, to be replaced by a woman, current premier, Kristina Keneally.


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