Australian prime minister rules out deals with opposition lawmakers to pass mining tax law

By Rod Mcguirk, AP
Thursday, August 19, 2010

Australian PM rules out deals on mining tax law

CANBERRA, Australia — Prime Minister Julia Gillard on Thursday ruled out compromising her mining tax plans in deals with opposition lawmakers if she wins Australia’s election, which she described as “a cliffhanger.”

A re-elected Labor Party government would likely need the votes of opposition senators to pass legislation that would raise an additional 10.5 billion Australian dollars ($9.4 billion) of tax revenue in two years from mining companies.

The Australian Greens, a minor opposition party that opinion polls show is likely to hold the balance of power in the Senate after Saturday’s election, wants the tax rate increased to raise an additional AU$2 billion.

But Gillard said her tax must remain in the form already agreed with Australia’s biggest miners: BHP Billiton, Rio Tinto and Xstrata.

“I’ll rule out any horse-trading with the Greens on the Minerals Resource Rent Tax,” Gillard told the National Press Club.

“If I am elected as prime minister on Saturday, the Minerals Resource Rent Tax I legislate will be the one that was agreed,” she added.

Opinion polls show that neither Gillard’s center-left Labor Party nor the conservative opposition coalition is likely to gain a majority in the upper house Senate.

Most polls agree with Gillard’s prediction of a tight race in the House of Representatives where parties form governments.

“This is a cliffhanger election,” she said after her final major speech before the election.

Gillard declined to foreshadow Labor’s strategy if the election results in a hung Parliament in which neither Labor nor the opposition coalition gains a majority in the 150-seat House of Representatives. The major parties would then likely seek the support of independent lawmakers to form a government.

Australia last elected a hung Parliament in 1940.

Labor swept to power in 2007 elections with 83 seats in the lower house.

Opposition leader Tony Abbott on Thursday campaigned in Queensland, a coal mining state where polls show that Labor has suffered it greatest fall in support since the 2007 election.

He predicted that a Labor government would increase the tax with Greens support and inflect greater damage to Australia’s most important export industry.

“Labor’s mining tax is a threat to the whole economy because there’s hardly any aspect of our economy which isn’t one way or another affected by the mining industry,” Abbott told reporters.

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