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.

Start your day with The Independent, sign up for daily news emails
News
Young Winstone: His ‘tough-guy’ image is a misconception
people
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Lena Headey as Cersei Lannister in Game of Thrones
film
News
i100
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
Voices
Strictly Come Dancing was watched by 6.9m viewers
voicesIt has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Arts and Entertainment
Roffey says: 'All of us carry shame and taboo around about our sexuality. But I was determined not to let shame stop me writing my memoir.'
books
News
Danielle George is both science professor and presenter
people
News
i100
News
Caplan says of Jacobs: 'She is a very collaborative director, and gives actors a lot of freedom. She makes things happen.'
people
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

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Ashdown Group: Senior Marketing Executive- City of London, Old Street

£40000 - £43000 per annum + benefits: Ashdown Group: Senior Marketing Executiv...

Ashdown Group: Marketing Manager

£40000 - £43000 per annum + benefits: Ashdown Group: An international organisa...

Ashdown Group: Internal Recruiter -Rugby, Warwickshire

£25000 - £30000 per annum: Ashdown Group: Internal Recruiter -Rugby, Warwicksh...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Monique Roffey: The author on father figures, the nation's narcissism and New Year reflections

Monique Roffey interview

The author on father figures, the nation's narcissism and New Year reflections
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Olivia Jacobs & Ben Caplan: 'Ben thought the play was called 'Christian Love'. It was 'Christie in Love' - about a necrophiliac serial killer'

How we met

Olivia Jacobs and Ben Caplan
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015