The Super Profits Tax will end in a legal minefield

THE super-profits tax will end in tears. Either there will be backflip or the government will lose the election, or both. In the event that the government survives and introduces the tax, it will collapse in a morass of constitutional and international litigation.

If the government is determined to have this tax, it should ask the people to clear the constitutional hurdles in a referendum. In addition, it should avoid international legal action by excluding all existing projects. But this would deprive it of the windfall income it hoped to have.

This mess is the consequence of its quite infantile decision to announce the tax as a fait accompli. This adversely reflects on the judgment not only of the Prime Minister but also of the "kitchen cabinet", the politburo-like body that is the federal government.

And with issues ranging from the home insulation scheme, the Building the Education Revolution rorts, the National Broadcast Network and asylum-seekers, even stalwart Labor supporters are beginning to question the ability of this government to deliver any program.

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The politburo just does not learn from its mistakes. Releasing an important tax review to a media lockup, sending the opposition front bench there and announcing the government response simultaneously was not only silly. This shows a serious contempt for the democratic process and for parliament itself. And having the review undertaken by the head of Treasury, then having him campaign for the tax offends the Westminster principle of an independent public service offering impartial advice to government.

The Rudd government argues this tax must be introduced to ensure a fair return to the people of Australia who, they say, own the resources. This is just not so. True, the minerals are vested in the crown, but it is not the crown in the right of the commonwealth, except for the territories. The minerals are vested in the crown in the right of the relevant state.

It is for the states to ensure the miners pay adequately for a depleting resource. And the states must, both to keep this income and to retain the power to determine how much should be paid. This is not Canberra's business.

Category:

News & Politics

Tags:

• Super
• Profits
• Tax