Twiggy: Mining tax deal with Rudd was imminent

Mining billionaire Andrew Forrest says he and former prime minister Kevin Rudd had struck a deal to rewrite the mining tax on the eve of the Labor party leadership coup, according to The Australian and Australian Financial Review.

The in-principle agreement reached in June 2010 would have seen mining companies avoid liability for the proposed 40% tax by writing off capital expenditure on related infrastructure.

“When Rudd was rolled, he had the principles of a new and different tax sorted out,” Forrest said, according to the AFR. He said the plan would have led to at least $200 billion a year going into national infrastructure.

“The prime minister’s office was desperate to get the deal finalised and announced that week. We sensed something was happening, but we had no idea Rudd was about to be removed as prime minister.”

Forrest said an agreement had been reached on June 21 and the next day Rudd told Forrest he had cabinet support, The Australian reported.

On June 23 Forrest was to hold a board meeting in Perth to sign off on the deal when the news came from Canberra of the leadership crisis.

“The word was ‘Rudd’s being rolled’,” Forrest told The Australian. “We were thunderstruck.”

Julia Gillard led a coup to dispose of Rudd on June 24, citing the government had lost its way. She called for a new approach to the mining tax.

She later made a deal with global mining giants BHP Billiton, Xstrata and Rio Tinto that Forrest claimed favoured the big multinationals over the mid-sized and smaller miners.

“We didn’t realise then that BHP and Rio had gone behind our backs to do another deal,” Forrest told The Australian.