Published: February 13, 2013 - 8:46AM
Julia Gillard faces a perfect storm over the mining tax after former prime minister Kevin Rudd re-entered the debate and another crossbench MP, Andrew Wilkie, stepped up his criticism of its design.
The Tasmanian independent told Fairfax Media he had been wrong to believe Treasury predictions of company liabilities under the renegotiated tax instead of the alternative arguments put forward at the time by Fortescue Metals Group's Andrew Forrest.
Mr Forrest had complained that the compromise to allow miners to write off the long-term value of assets from their liabilities had allowed the big three miners off the hook.
''It is beyond argument that the government was wrong, is wrong, and Andrew Forrest is right,'' he said.
He said the government owed Mr Forrest an apology for ignoring his warnings that the depreciation allowances were too generous.
Government whip Joel Fitzgibbon also called for changes, describing the tax as ''unquestionably a good thing'' but flawed in the way it allows states to jack up royalties at the Commonwealth's expense.
''The arrangement with the states with respect to royalties is untidy, inefficient and, I think, unsustainable. Review and reform will be necessary with respect to this taxation regime.''
This comes as the mining industry ramps up its campaign against Labor - should it decide to toughen up the mining tax.
The Minerals Council of Australia took out full page advertisements in The Australian Financial Review and The Australian newspapers on Wednesday, arguing that the mining industry ''pays its fair share of tax'', given that the mining tax is on top of company tax and royalties.
''The new Minerals Resource Rent Tax must be kept in perspective . . . Enough is enough in relation to the obsession with increasing taxes on mining in Australia.''
But calls to rework the tax, which has the support of the Greens and the independents who supported it, is being met by resistance from the opposition, which again hammered the issue in Parliament on Tuesday.
It demanded that Ms Gillard rule out changes to give miners investment certainty. Ms Gillard would say only that the government had ''no plans'' to alter it.
The government remains committed, however, to altering the royalties arrangements with the states to stop them from gouging the tax.
Mr Rudd's comments on the underperforming tax linked its paltry $126 million return for the first six months of operation with his replacement by Ms Gillard and Treasurer Wayne Swan.
His no doubt unwelcome intervention came via several media appearances as Ms Gillard and Mr Swan struggled to adequately explain why they had committed billions in new spending on superannuation and business tax breaks funded by the tax, which had not delivered.
When asked in a Sky News interview if the new Labor leadership team had given away too much to the miners, Mr Rudd replied: ''History will be the judge of that.'' He said his successor had made ''some significant changes to the structure of the tax''.
With the entire crossbench now backing a reconsideration, Mr Rudd stopped short of prescribing a fix but left no doubt about his views, ''given the fact that it has not collected any real revenue of any significance so far''.
Friction from crossbench and Labor MPs has increased fears within the opposition that Labor could make a late leadership manoeuvre.
Liberals say a sudden switch back to Mr Rudd would ''reset the politics'' in this election year, putting new pressure on Tony Abbott's leadership.
And it could throw election timing into turmoil.
Ruling out overseas trips by Coalition MPs, Mr Abbott said: ''Be ready, be visible and be in Australia.''
with Judith Ireland
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This story was found at: http://www.dailylife.com.au/federal-politics/political-news/gillard-buffeted-over-mining-tax-20130212-2eb4d.html