Rudd engages in tax hard sell in WA

Kevin Rudd is trying to convince all West Australians they deserve a bigger share of
their state's mining wealth but more than 2000 people remain adamant he needs to
"axe the tax".
And Western Australia will get a $2 billion sweetener - one third of a $6 billion
fund - to spend on roads, rail and ports, aimed at persuading the state it will
still benefit from the proposed impost on its resources.
As he faced a growing struggle to convince the wider community of the merits of the
resource super-profits tax (RSPT), Mr Rudd headed to WA, where condemnation of the
policy is the loudest.
The prime minister was left in no doubt his tax was on the nose when a rally of
unlikely bedfellows, including mining workers and business people, took to Perth
streets to voice their concerns.
A crowd of more than 2000 rallied in a city park just a few hundred metres from a
hotel where the prime minister was to later address the Perth Press Club at
lunchtime on Wednesday.
They heard from Fortescue Metals boss Andrew "Twiggy" Forrest, who later verbally
tackled Mr Rudd during the luncheon over the lack of consultation before the tax was
announced.
Mr Rudd has also come under criticism from one of his own - former Labor finance
minister Peter Walsh - for not following a more rigorous consultative process, like
the Hawke government did when it introduced a similar petroleum tax in the 1980s.
"They should have followed the same pattern. But there's an obstacle to that, and
that obstacle is Kevin Rudd," he told The Australian newspaper.
There were no fireworks at the park - it was well away from the official event - but
demonstrators got a chance to vent their anger when they inadvertently crossed paths
with Mr Rudd on the street.
People hurled abuse from nearby buildings while others called out "you're a dud
Rudd" from across the street.
Mr Rudd, however, was resolute as he told his lunch audience the tax was necessary
to share the resource bounty with the many West Australians not involved in the
mining industry.
He also flagged a sweetener for the state - it will get one-third of what will now
be a $6 billion infrastructure fund financed from the RSPT.
The infrastructure spending - originally announced on May 2 - was expected to be
worth $5.6 billion.
But now the government will put an extra $400 million into the fund - to be taken
from the budget - and will start it from 2010/11, two years ahead of schedule.
"It means investment can start now, to address our urgent infrastructure needs,
rather than waiting for revenue proceeds of the resource super-profits tax to flow,"
Mr Rudd told the luncheon.
He renewed the government's campaign to win over the people of the state not seeing
the direct dividends of the mining boom.
"The last mining boom delivered very large profits both in Queensland and in Western
Australia but not for all working families ..." Mr Rudd said.
He cited the circumstances of Richard Dow from High Wycombe, who worked in
disability care and earned just $35,000 a year.
"For hundreds of thousands of West Australians like him, the mining boom meant
higher rents, bigger mortgage debts and increased costs of living," Mr Rudd said.
Winning the hearts and minds of ordinary West Australians - as well as the resource
sector - is a critical issue for the government, where Labor has struggled to build
support.
It only holds four of the 15 lower house seats in WA. Its diminishing support will
make it hard for the government to hold the marginal seat of Hasluck and decreases
the prospect of winning back seats like Stirling, Cowan and Swan.
The federal opposition says the government's decision to increase an infrastructure
fund for the mining states is nothing more than a desperate bid to buy votes.
Opposition Leader Tony Abbott says it is a clear sign the government is getting
desperate and trying to "buy votes" ahead of the 2010 election.
"He said last election he was going to set up a special fund with the proceeds of
Gorgon (under the petroleum resources rent tax) to put infrastructure into Western
Australia," Mr Abbott told Fairfax Radio on Wednesday.
"To the best of my knowledge that has not yet happened because the Gorgon proceeds
don't start coming until 2014."
"People are getting pretty cynical about everything Kevin Rudd promises and I think
this looks like an election buying bid not a serious attempt to build Western
Australian infrastructure."
Mr Abbott said the private sector builds much of the infrastructure in the state
anyway and this is a sign Mr Rudd believes government spending is the "be all and
end all".