06 June 2010

Was Kevin Rudd looking for this fight?

Shortly after the Government revealed to a startled world its thinking about the particular form that a resource rent tax might take, an old Treasury colleague of mine commented to me that the fight that had broken out with the mining industry was no accident – it was a fight that Kevin Rudd wanted to have.

That is certainly the view of Sydney Morning Herald political editor Peter Hartcher, for whose views I have a great deal of respect; see Big miners gave Rudd the fight he was looking for, Sydney Morning Herald, 29 May 2010.

Hartcher begins:

One of the most mistaken ideas to take hold in politics in recent weeks is that Kevin Rudd has somehow been shocked that the big miners are reacting ferociously to his proposed new mining tax.

To believe this, you'd have to think Rudd some sort of moron. He certainly did not decide to spring a big new tax on the richest companies in the country, just before an election, in the expectation that they would calmly invite him to tea to negotiate.

Rudd wanted a fight. That's the whole point.

In explaining what the Prime Minister wants to achieve in taking on such a large and well funded industry, Hartcher says:

First, it is designed to make him look strong. Second, it is set up to position him as the champion of the values of Australian fairness against the miners' self-interest. Third, it makes Rudd a fighter on behalf of "working families".

And fourth, a fight generates its own publicity - it is filling the national political headspace on the subject of Rudd's choosing. Stories about ceiling insulation bungles and school hall rip-offs are bumped in the face of this titanic struggle.

I am inclined to think that there is also an element of political incompetence involved in this. As I commented in Resource rent tax: what happened to the nemawashi?, the Government would have been well advised to publish the Henry Tax Review the day it was delivered to them, accompanied by a statement that this was an independent review, and the Government would consider it carefully and announce its decisions in due course after consultations with affected parties and relevant experts. This would have given the Government the opportunity to gauge the reactions to all of the recommendations of the report, to gain a broader spectrum of expert opinion on each of them, and to design a suite of policies that it could both explain and sell.  But I can just hear the inexperienced spin doctors counselling the Prime Minister not to put the report “out there” until he had all the answers – otherwise “you will only encourage speculation and might lose control of the debate”.

If it is true that this is a war of choice – and I am sure the Prime Minister is happy to have the fight – we really do need to talk about Kevin (see We need to talk about Kevin) it would have to stand both as one of the greatest acts of irresponsibility and one of the greatest acts of narcissism in modern Australian political history.

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