Gillard set to finalise mining deal

Julia Gillard is set to finalise a deal with miners on the contentious resources
tax, ending a two-month fight that has threatened Labor's re-election chances.
The prime minister was scheduled to return to Canberra at 8pm on Thursday to meet
with mining executives in Parliament House, in what looks to be her first major
achievement since coming to office a week ago.
She will arrive back in the national capital after spending the day at the funeral
of fallen soldier Ben Chuck in north Queensland.
Her deputy Wayne Swan and Resources Minister Martin Ferguson have been in Canberra
finalising negotiations with mining giants BHP Billiton, Rio Tinto and Xstrata.
The government is understood to have offered concessions to the mining industry as
Ms Gillard strives to have a deal ready for the upcoming election.
While the government would not confirm any details of the parties reaching an
agreement on the tax, reporters spotted two drinks trolleys laden with champagne,
wine and beer being wheeled into the cabinet room about 5.30pm.
Earlier on Thursday Mr Swan indicated the government's willingness to negotiate with
miners.
"I don't intend to put any boundaries around those discussions," the treasurer told
Fairfax Radio Network.
The government appears to have given ground on where the super profits tax would cut
in.
The former Rudd government initially set the threshold at the 10-year bond rate, now
hovering at 5 per cent.
But Fairfax reports agreement has been reached where the tax would cut in at the
long-term bond rate plus seven percentage points.
Under this deal, the super profit threshold would be 12 per cent.
The level is higher than the 10 per cent threshold of the petroleum resource rent
tax, introduced in 1987, which is based on the 10-year bond rate plus five
percentage points.
Queensland Premier Anna Bligh has previously lobbied the federal government to amend
the resources super profits tax so that the uplift is similar to the petroleum tax.
Former prime minister Kevin Rudd had maintained the government would not budge on
its 40 per cent headline rate for the resource super profits tax.
But the Gillard government has signalled it could compromise on this point, Fairfax
said.
The mining industry has also raised objections about the retrospective nature of the
tax, something which the government is willing to address.
A deal with the miners could also exempt lower value resources like sand, gravel and
limestone from the regime, as well as nickel mining and processing, Fairfax said.
Politically, this arrangement would dent Opposition Leader Tony Abbott's assertion
the mining tax would push up the price of house construction.
But a re-elected Labor government could face another obstacle if the Australians
Greens win the balance of power in the Senate.
A day after Rio Tinto iron ore chief Sam Walsh called on the government to keep any
deal after the election, Greens leader Bob Brown said Labor should not expect the
Senate to be so compliant.
"There's a small thing called democracy here and a big thing called the Australian
parliament, and unless Labor gets control of both houses, and that's not going to
happen, then the agreement will be subject to parliamentary scrutiny," Senator Brown
told reporters in Sydney.
Treasury expects the mining tax proposal in its current to generate $12 billion in
2012 and 2013.
Senator Brown said his party did not want the government's "very secret"
negotiations with the mining giants to reduce potential revenue.
With Labor bracing for good news on the mining tax, Health Minister Nicola Roxon
played a more defensive role on Thursday, criticising the opposition's $1.5 billion
mental health policy.
The coalition plans to fund 800 early intervention beds by aborting Labor's plans
for GP super clinics and e-health.
"It just seems to me to be a crazy way to fund what might otherwise be a worthy
proposal," the minister told Sky News.