PM Gillard fights on multiple fronts

15 Feb 2013, 1:03 pm   -   Source: AAP

Prime Minister Julia Gillard is fending off attacks on economic policy and internal Labor rumblings, as Tony Abbott remakes his image.

There's a point in warfare when there are too many fronts to defend and defeat appears inevitable.

This is what happened in federal politics this week when Prime Minister Julia Gillard found herself fending off attacks from dozens of angles, including from within her own caucus, over Labor's revenue-challenged mining tax.

One of the frontline snipers was Kevin Rudd.

The former prime minister weighed into the debate by agreeing the tax wasn't raising enough money, while placing the blame at the feet of Gillard and Treasurer Wayne Swan.

Gillard rolled Rudd from the top job in part because of his inability to strike a deal with mining bosses on the initial version of the tax in 2010.

Now holding court from the backbench, Rudd pointedly suggests the government shouldn't be bullied - like he was by the mining industry and the opposition - if it decided key elements of the 30 per cent tax on coal and iron ore super-profits should change.

"No government should ever take a backwards step in pursuit of the national interest," he said.

The implication of his remarks is that Swan and Gillard gave too much leeway in terms of deductions and asset valuations to the big three miners when they struck a new deal in 2010 - and not to deal with it would be remiss.

The mining industry has seen the threat and this week placed advertisements in major newspapers saying it was already paying its fair share of tax and wouldn't accept any reneging on the deal signed by Gillard.

Much of this week's parliamentary session this week was taken up with debate on whether the mining tax's parameters would be changed, and whether this would create uncertainty for mining investors.

The prime minister repeatedly argued it was "well known" talks were under way with the state treasurers on the issue of mining royalties, which can be deducted by miners BHP Billiton, Rio Tinto and and Xstrata Coal from their minerals resource rent tax (MRRT) liabilities.

So far the government is resisting calls from independent and Greens MPs to broaden the base of the tax and close "loopholes" which have seen it raise only $126 million in its first six months - making the full year target of $2 billion extremely unlikely.

Opposition Leader Tony Abbott said if Labor made any changes it would be another broken promise by Gillard.

Resources Minister Martin Ferguson, a Rudd supporter, came to the prime minister's defence.

Some 63,000 mining jobs have been created in the past year and the $280 billion of proposed investment in the pipeline proves investors aren't fazed, he argues.

Mr Ferguson went so far as to say the miners preferred profit-based taxation over much less efficient state royalties.

Meanwhile, claims the government plans changes to the way superannuation is taxed, to help fix its budget problems, are also dogging the prime minister.

Superannuation is one of those issues that affects every voter, and political parties tinker with it at their peril.

Shadow treasurer Joe Hockey this week met with super industry stakeholders in Canberra in a bid to rally them to the coalition's cause.

"Every family needs to know the government is coming after their savings," he told the private meeting.

Self-managed superannuation funds and the wealthiest retirees appear to be in Labor's sights ahead of the May budget, as the government prepares to spend big on initiatives such as the National Disability Insurance Scheme and schools funding boosts.

Superannuation minister Bill Shorten has the support of the welfare sector, education lobby and unions when he argues much of the $32 billion in tax breaks on super goes to a small proportion of wealthy individuals.

Hockey says a coalition government won't make any unexpected changes to super.

But Labor points to the coalition's plan to abolish the mining tax - the revenue from which cover the abolition of tax on super for low-income earners - as evidence to the contrary.

Next week, the prime minister will open a new front on industry policy when she delivers a landmark speech on innovation and jobs.

Labor strategists see her expected statement of support for manufacturing as a big plus for the "workers' party", especially in blue-collar marginal seats.

And they see a weak point in a possible coalition government, which is likely to target industry assistance in its bid to find budget savings.

But Abbott appears to be prospering with his new "positive policy" strategy - he's no longer regularly suspending question time to attack Labor - a game plan that includes bipartisanship on such issues as this week's Act of Recognition for Indigenous people.

The leaking of two uncosted and short-on-detail draft policies - on northern Australia and the building of dams - was spun as a show of "imagination" from the coalition in the lead-up to the September 14 federal election.

Next week's Newspoll will be scoured for evidence of improvements in the personal ratings of the leader dubbed "Doctor No" by the government.

With the coalition already holding a clear lead in the two-party vote, a positive shift in the punters' feelings about Abbott will cause further headaches for Gillard and Labor.

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