The battle over the resources super tax has shifted into top gear with Prime Minister Kevin Rudd promising an extra $400 million for roads and rail in the mining states.
When the government unveiled the Henry review on May 2, it indicated it would set up a national infrastructure fund, which would be established with commonwealth funding of $700 million, starting in 2012/13.
Mr Rudd said the new fund would be made up of $5.6 billion from the resource super profit tax, as previously announced. But the government would now put an extra $400 million – already provided for in the budget – into the fund between 2010/11 and 2013/14.
“It means investment can start now, to address our urgent infrastructure needs, rather than waiting for revenue proceeds of the Resources Super Profits Tax to flow,” Mr Rudd told the Perth Press Club today.
“Today I can also announce that Western Australia should expect more than $2 billion in additional infrastructure investment from this fund.”
“It is not right that the regions and towns producing so much of Australia’s wealth should suffer from a poverty of investment,” Mr Rudd said.
“It is my intention that the lion share of the infrastructure fund generated by the Resources Super Profits Tax should go to the major resource states of WA and Queensland – consistent with each state’s share of total mining production.
“The government will therefore establish a new $6 billion Regional Infrastructure Fund.”
More than 2000 protest over mining tax
Earlier, more than 2000 mining industry workers have rallied in a Perth park to protest against the federal government’s proposed resources tax.
At the protest meeting, the chief of Fortescue Metals Group, Andrew Forrest, accused Mr Rudd of going communist in imposing the tax while communist China moved the other way.
From the back of a large flat bed truck, mining magnate Gina Rinehart led the crowd in chants of axe the tax.
Protesters held up mass produced placards bearing the slogans and then chanted, “super tax, super stupid”, “super tax kills jobs” and “Rudd’s mining tax hurts us all”.
Mr Forrest, who is due to meet Mr Rudd later today, told the rally their numbers were more than Prime Minister Kevin Rudd would have expected.
“In China right now there’s a fierce debate about how to lower their resources tax to encourage the mining industry.” Australia was doing the opposite, Mr Forrest said.
“I ask you which communist is turning capitalist and which capitalist is turning communist.”
Mr Forrest told protesters this was their opportunity to change Australia’s direction from the direction Mr Rudd was taking it, which was largely socialist redistribution over the creation of value.
Elizabeth Kelly, who works in the accounts department of mining company Sandfire Resources, said the tax would definitely hurt the mining industry. “I’m here because I don’t want to lose my job,” the 28-year-old said.
Mr Forrest, in yellow and blue mining overalls, said the hopes and aspirations of fellow Australians were pinned on mining workers and their chances of having prosperous careers without being “ripped off halfway through the game”.
“We represent so much more than mining, we represent the hopes and dreams of thousands and millions of people who depend on the mining industry, who depend on the resource sector for a strong Australian economy.
“This day is about your opportunity to change Australia’s history from where Kevin Rudd would take it, a largely socialist distribution of capital over creation of value.”
James Pearson of WA’s Chamber of Commerce said businesses across the state were concerned about the new tax because their prosperity depended on a strong and growing resources industry.