Australian billionaires take to the streets for tax protest

It was, by any measure, a most unusual rally. Many of the placard-waving protesters gathered in a Perth park wore suits and ties, and impassioned speeches were delivered from the back of a flat-bed truck by two billionaires, including Australia's richest woman.

Gina Rinehart's pearls glistened in the sunlight as she bellowed through a megaphone: "Axe the tax!" Ms Rinehart has a personal fortune of $4.8bn (£2.7bn). Andrew Forrest, in monogrammed worker's overalls, told the well-mannered crowd that Australia was "turning Communist". Mr Forrest is the country's fourth richest person, worth an estimated $4.2bn.

Both Mr Forrest and Ms Rinehart have amassed their wealth from digging up iron ore in the remote Pilbara region. Like other mining magnates, they have grown fabulously rich during a resources boom based largely on China's insatiable demand for the coal, iron, nickel and other minerals that lie in abundance beneath Australia's rust-red soil.

Now Kevin Rudd's Labour government is planning to levy an extra tax on the mining industry, and the industry is furious. The issue has dominated the political agenda for weeks, and is even threatening to torpedo Mr Rudd's chance of being returned to power at an election due to be held before the end of this year.

Labour, which had an unassailable lead over the conservative Liberal-National Party coalition six months ago, is now trailing by six percentage points, according to a poll this week. If that were translated into votes on election day, Mr Rudd would become the first prime minister for nearly 80 years to lose office after just one term.

The so-called "super tax" – which will claim 40 per cent of profits above the long-term government bond rate – is not the only reason why Labor was so unpopular. There is a bungled home insulation scheme, blamed for four deaths. There is Mr Rudd's decision to freeze the processing of claims by Afghan and Sri Lankan asylum-seekers. And there is his postponement of a carbon emissions trading regime – this from a man who once called climate change "the greatest moral and economic challenge of our age".

But there is no doubt that the tax has compounded the government's problems. Resources, which account for more than 40 per cent of exports, have been the bedrock of the economy for years. It was largely thanks to mining that Australia – alone among developed nations – barely noticed the global financial crisis. Some see the imposition of an extra financial burden on the industry as positively unpatriotic.

Mr Rudd argues that the new tax, which will be used to boost pensions and fund infrastructure programmes, will spread the fruits of the mining boom more fairly. At present, the mineral-rich states of Western Australia and Queensland profit disproportionately. And while those who work in the industry are handsomely paid – train drivers in the Pilbara earn up to $210,000 – many Australians derive little benefit.

For their part, the mining companies, led by the multi-nationals BHP Billiton and Rio Tinto, claim the tax will reduce their competitiveness and threaten thousands of jobs. Amid much fanfare, they have already shelved a number of projects. They have also launched a major advertising campaign. The government has responded with its own advertisements, using $38m of public money. Before coming to power, Mr Rudd promised to curb taxpayer-funded advertising on political issues.

So far, the miners appear to be winning the argument. A poll commissioned by the industry, and conducted in nine marginal seats, found 48 per cent of people opposed to the super tax, with 28 per cent in favour. Nearly one in three said they were less likely to vote for Labour because of it.

This week's rally – organised by the Association of Mining and Exploration Companies (AMEC), which represents the smaller operators – was timed to coincide with a visit by Mr Rudd to Perth, the city that is Australia's resources powerhouse.

As the Prime Minister addressed a lunch hosted by the Perth Press Club in the Hyatt Regency Hotel, Ms Rinehart was filling her lungs with air in a nearby park. "And what are we gonna tell those jittery Labor MPs in marginal seats?" demanded the normally reclusive billionaire through her loudspeaker. "Axe the tax! Axe the tax!" chanted the crowd.

"And what does our Premier [the Liberal Premier of Western Australia, Colin Barnett] say?" asked Ms Rinehart, almost hoarse. "Axe the tax! Axe the tax!" replied the protesters. She went on: "And Kerry [Stokes, proprietor of the state's newspaper], please listen: what should our West Australian newspaper be saying? Axe the tax!" More cheers from the crowd.

Mr Forrest once called Mr Rudd a close friend. Now he is the prime minister's most outspoken critic. At the rally, he declared: "We represent so much more than mining; we represent the hopes and dreams of millions of people who depend on the mining industry, who depend on the resource sector for a strong Australian economy." (His hyperbole did not go unnoticed by sober commentators; the industry employs about 130,000 people.)

As the crowd waved their neatly written placards – handed out by AMEC, and bearing slogans such as "Super tax, super stupid" and "Super tax kills jobs" – Mr Forrest noted that China had been debating a lower resources tax to assist its industry. "I ask you: which communist [country] is turning capitalist, and which capitalist is turning communist," he proclaimed.

Mr Forrest has built his company, Fortescue Metals, up from nothing within the space of a few years. Ms Rinehart inherited her company, Hancock Prospecting, from her father, Lang Hancock, who spied the Pilbara's potential in the 1950s when stormy weather forced his light plane to fly low over its rust-red gorges. He realised the walls were made of solid iron ore.

Now Rio Tinto, BHP and Fortescue produce 350 million tons of iron ore a year in the Pilbara. Much of it is shipped to China, as raw material to fuel that country's industrial revolution. South Korea, India and Japan are also major customers.

Mr Rudd is locked in negotiations with the mining industry, and has offered several sweeteners, including a guarantee of extra infrastructure funds for Western Australia. Whether he can persuade this most powerful of lobbies of the wisdom of his new tax, and resurrect his political fortunes in time for the election, remains to be seen.

Sport
Farah returns to the track with something to prove
Commonwealth games
News
John Barrowman kisses his male “bride” at a mock Gretna Green during the Commonwealth Games opening ceremony
peopleBarrowman's opening ceremony message to Commonwealth countries where he would be sent to prison for being gay
Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
Shinji Kagawa and Reece James celebrate after the latter scores in Manchester United's 7-0 victory over LA Galaxy
football
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
i100
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Microsoft Dynamics CRM Consultant

£50000 per annum + benefits: Progressive Recruitment: Urgently seeking a Dynam...

Test Lead - Financial Reporting - Banking - London

£350 - £400 per day: Orgtel: Test Lead, London, Banking, Financial Reporting, ...

Business Analyst, Retail Bank, £375-400p/d

£375 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Embedded Software Consultant

£50000 - £60000 per annum + V. Competitive : Progressive Recruitment: Embedded...

Day In a Page

Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

Screwing your way to the top?

Good for Lana Del Rey for helping kill that myth, says Grace Dent
Will the young Britons fighting in Syria be allowed to return home and resume their lives?

Will Britons fighting in Syria be able to resume their lives?

Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

Beyoncé poses as Rosie the Riveter

The wartime poster girl became the ultimate American symbol of female empowerment
The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

The quest to find the perfect pair of earphones

Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

Meet the US Army's shooting star

Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
Climate change threatens to make the antarctic fur seal extinct

Take a good look while you can

How climate change could wipe out this seal
Should emergency hospital weddings be made easier for the terminally ill?

Farewell, my lovely

Should emergency hospital weddings be made easier?
Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

Crowdfunded novel nominated for Booker Prize

Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

Vladimir Putin employs a full-time food taster

John Walsh salutes those brave souls who have, throughout history, put their knives on the line
Tour de France effect brings Hollywood blockbusters to Yorkshire

Tour de France effect brings Hollywood blockbusters to Yorkshire

A $25m thriller starring Sam Worthington to be made in God's Own Country
Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

Will The Minerva Project change the face of higher learning?

The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
The 10 best pedicure products

Feet treat: 10 best pedicure products

Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

Commonwealth Games 2014

Great Scots! Planes and pipers welcome in Glasgow's Games
Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

Jack Pitt-Brooke

Manchester City and Patrick Vieira make the right stand on racism
How Terry Newton tragedy made iron men seek help to tackle their psychological demons

How Newton tragedy made iron men seek help to tackle their psychological demons

Over a hundred rugby league players have contacted clinic to deal with mental challenges of game