A splendid victory for the dark art of PR, and guess who has to pay for it


It’s a sad indictment of democracy in Australia that a cabal of multinational miners – with nary a vote between them – could see off one prime minister and rush another into broad compromise. What sublime validation of the power of advertising and public relations.

The Herald marketing editor, Julian Lee, estimates the miners had to spend only $7 million of their mooted $100 million advertising war chest to finally mince Kevin Rudd’s prime ministership, and in little more than a month. The sheer menace of another tranche of ads during an election campaign has brought a quick though majestic cave-in by Canberra.

Julia Gillard’s new government – assuming there is no dramatic reversal on the deal revealed yesterday by Malcolm Maiden in BusinessDay – should have had time on its side. Why rush a settlement? The electoral risk of another barrage of mining ads.

That’s value for money: $7 million spent to save $7 billion in royalties – which is what the government should have dubbed the resource super profits tax in the first place.

”Royalties”, the price you pay for digging other people’s stuff out of the ground. ”Royalties”, the rent you stump up via a lease to the owners of the minerals – the taxpayers – is the word the government should have used to sell its case.

We the taxpayers can consider ourselves robbed. Not by the miners. It is their fiduciary duty to pay as little tax as possible. Rather by the government, whose duty it is to manage scarce resources in the interests of the nation – not to mention stand tall for public interest in the face of vested interest.

The government’s ad campaign was feeble, its sale process bumbling, sapping the confidence of markets from the start. Aided by shamefully partisan reportage from sections of the media, the Rudd regime failed to sell its policy from the word go.

This was not merely a win for advertising but a thumping victory for the dark art of public relations.

The miners forked out for the most venally effective PR money could buy. It worked a treat. Some of the coverage from business pundits was more shrill than even the most hysterically indignant press releases emanating from the Minerals Council.

When details of its deal with the miners is made public, perhaps today as is speculated, the government will lamely spin the outcome as a win, an act of bold and expeditious decision by the new leader. The abject failure of the government in the face of corporate pressure will be evident though in revisions to budget estimates. There will be a number on it.

For their part, the big mining companies – Rio, BHP and Xstrata in particular – have scored a historic victory. This was the stand they had to make, or else face a prospective domino effect of royalty increases around the world, not to mention the billion-dollar leakage of royalties in Australia to kick things off.

Should any one ever ask if advertising works, there could be no more convincing evidence than this campaign against the tax.

The ultimate irony in the super profit tax saga is that taxpayers get hit twice. That $7 million cost of deposing an elected prime minister is tax deductible.

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