Whilst I don’t think the miners were the main reason why Kevin Rudd was voted out of the top job, I do think that the Resource Super Profits Tax (RSPT) had something to do with it.
Kevin Rudd has made a series of poor policy decisions along the way including backing down on the Emissions Trading Scheme, the installation of insulation batts and the school funding fiasco. However the introduction of the RSPT was probably the final straw for him particularly within Labor’s right.
Over the last few days we have heard about Senators from the right such as David Feeney, Don Farrell, Bill Shorten and Paul Howes – who all had a hand in orchestrating the demise of a person who was once Australia’s most popular PM. But who are these people?
Paul Howes is the national secretary for the Australian Workers Union – a representative for workers in the metals, aviation, oil and gas, mining, construction, food processing and retail industries, as well as its traditional base in the pastoral and mining areas. The pieces are starting to fall into place.
As soon as Kevin Rudd decided to start a war with the miners through the proposed introduction of the RSPT, Paul Howe and Co. would have had felt the heat from the unions he represents - basically Kevin had to go or they would have to face an angry mob of miners.
Will Julia Gillard make a difference to the economy?
This is an interesting question. Given that Wayne Swan is now the deputy PM, the senior team members have essentially not changed. Being senior members of Kevin Rudd’s team, these people would surely have had a say in all the policies Kevin had announced. No amount of comments from Julia could destroy the link between her and the poor policies of the Rudd government. She was the deputy PM afterall.
So it would be fair to say that Julia had supported all of the policies, which brings us back to the original question will Julia make a difference to the economy?
I think in the short time she has before the looming election, the answer is no. Much like the NSW premier, Kristina Keneally, Julia Gillard is probably going to be a puppet for the right faction. As a start, she has said she is willing to negotiate on the RSPT.
In terms of the share market, if all things in the world economy remain the same, we will likely see some positive moves in the share market as the government negotiates or removes the RSPT altogether. We will also likely see the AUD become stronger against the US as foreign investors come back into our share markets.
If there is one lesson to be learnt from all this, in politics, you never mess with the miners.
Hey, Alfred here – Did you enjoy my latest article? Do you have any questions or Feedback for me? Call me on (02) 9266 2269 or Book an Appointment online.
Remember that our first meeting is cost and obligation free.
