Why Andrew Forrest is right to fight the behind-closed-doors mining tax deal: Burgess

There was little sympathy in journalist’s questions to Andrew ‘Twiggy’ Forrest yesterday, as the Fortescue Metals boss stood on the doorstep of parliament house to explain why he is contemplating a constitutional challenge to the Gillard government’s minerals resource rent tax.

Forrest tried to make the distinction between “home-grown Australian companies”, such as Fortescue, and “multinationals” such as BHP, Rio Tinto and Xstrata.

But wasn’t Fortescue mostly funded with Chinese capital, asked one reporter. No, protested Twiggy, it was mostly raised in US bond markets. Much more Australian.

And wasn’t Twiggy being hypocritical, having stood in the back of a ute with Gina Rinehart in 2010 to yell “axe the tax” over the Rudd/Swan resource super profits tax in 2010, only now to turn around and say he’s “prepared to pay any tax that this great country, its constituents and elected representatives levy against me and my industry”?

“I’m glad you asked that question,” said Forrest, explaining that the RSPT would have thrown Australia into a deep recession. “I’m very, very glad I fought that hard. What I didn’t know was that the companies that funded the ad campaign against that tax, and who didn’t speak out publicly as we did, would be invited into a room, they’d get to invent a solution which would have them protected from the tax.”

Of course, the big miners weren’t exactly ‘protected’ from the new tax. As Stephen Bartholomeusz explained yesterday, BHP, Rio and Xstrata will still pay the bulk of the tax, though Fortescue and its smaller peers will take a proportionally much bigger hit to their profitability and value.

Despite seeing a big write-down in his own personal wealth, Forrest stressed that he was focused heavily on the political side of the MRRT’s creation, saying “this is a very personal situation – you take a view as an Australian before you take a view as a company executive … any multinational could start an advertising campaign against the PM or deputy PM and Treasurer, and have their campaign stopped because they’re promised an exoneration from a tax that everyone else will pay … that’s a terribly bad precedent and Australia should fight it.”

And that’s the really useful point to come out of Forrest’s doorstop performance. His comment drives right to the heart of what kind of country Australia wants to be – is it, as critics have remarked in recent years, the country of big government, big unions and big corporations, or is it a country that champions the liberty and democratic rights of those who belong to none of those institutions?

The theme is not new – in yesterday’s joint-party room meeting, Julie Bishop restated the Liberal Party’s commitment to “freedom and individual choice” – but Australian voters are being badly let down by both sides of politics in this respect.

Labor’s slow evolution to be the party of big business has taken decades, but the closed-door agreement with the big miners showed that journey is complete.

The Liberal Party, which should be the natural home of individualistic political philosophy, is hardly doing better. It has spent the past six months focused on attacking the carbon tax – a small-government approach to tackling climate change – and proposing to replace with a big-government carbon regulation scheme.

That attack continues to hurt Labor – today’s Newspoll shows the two-party-preferred vote blowing out further in the Coalition’s favour, at 55/45 per cent – but all that energy, rage and bluster would have been better directed at the big-business/big-government nexus that led to the creation of the mining tax.

Such an attack would have been true to the Liberal Party’s own philosophy. The political pay-off would not have come so quickly, but in the long-term it would have created a more consistent narrative to take to the 2013 election. There have been small forays into this topic by the Coalition, but they have been drowned out by carbon fury.

The government is starting to win the carbon debate due to the fact that it always had the overwhelming support of scientists and economists for its carbon plan. The best Tony Abbott can do now is allow his carbon-tax war to subside, and focus on policy areas that he should own – the evolution of the MRRT being a prime example.

Instead, who is standing up for small Australia? Independent MP Andrew Wilkie, who yesterday said he may review his support for the MRRT legislation if it unfairly undermines smaller resources companies.

Whatever Forrest’s financial motivation for attacking the MRRT, his political point needs to be taken seriously. The closer Australian government drifts towards closed-door deals between big-business and big-government, the closer we drift to China’s model of state capitalism. It might be good for growth, but how many democratically-minded Australians are prepared to give up basic rights for that?

This article first appeared on Business Spectator.