Rudd's spin amounts to false and misleading advertising

IF Kevin Rudd were a corporate entity instead of Prime Minister, he could be sued for misleading and deceptive conduct under section 52 of the Trade Practices Act for dubiously naming his new resource rent tax a super profits tax.

Or, perhaps under state legislations, he could be charged with false and misleading advertising for any campaign that described it as a super profits tax.

The so-called super profits tax kicks in on all mining company profits above the government bond rate of about 6 per cent. That means standard banking term deposits, most of which earn an interest rate above 6 per cent, would incur a super profit tax if the government didn't restrict it to the mining industry.

To put the absurdity of calling the new mining tax a super profits tax when it kicks in so early, consider the following. Finance Minister Lindsay Tanner described the projected return from the national broadband network as modest at 7 per cent. If that modest return were profit in the mining sector, it would incur a super profit tax. Work that one out.

This article is not taking issue with the validity of introducing a new resources profits tax. There are arguments for and against such a tax. (A profits tax is a good idea; the issue is the point at which it applies and the cumbersome process of allowing states to continue to collect royalties that are rebated by the commonwealth.)

This article is focused on the way our Prime Minister uses rhetoric to sell his vision without regard for accurate labelling. Rudd's rhetoric isn't just over-the-top; it is often downright misleading.

At the 2020 Summit, human rights barrister Julian Burnside QC said he would like to see "a law [that] would make it an offence for politicians to engage in false and misleading conduct".

Given politics is all about crafting subjective arguments to persuade voters to support particular ideological positions, it would be difficult to enforce such a law. But that doesn't mean we shouldn't hold Rudd to account informally when his rhetoric falls within the ambit of what Burnside would like to have legislated against.

All politicians use spin. John Howard did it when he claimed the GST would be "a simpler and fairer tax system". And he did it again with the name given to his draconian industrial relations laws, the warm and fuzzy-sounding Work Choices.

But Rudd doesn't just spin; he uses inaccurate terminology aimed at winning populist support, not on the facts but by pulling the wool over people's eyes. It is one reason his popularity has waned, as the public cottons on to what he is doing. From the education revolution to the federal takeover of public hospitals and ending the blame game with the states, Rudd sells his plans by overstating what he intends to do.

It is not a revolution to put laptops in schools, build school halls and set up a website with information for parents. Some of it may be good policy, but it's not revolutionary policy. It isn't a federal takeover of public hospitals to change the funding allocation between the commonwealth and states from 50-50 to 60-40. And you don't end the blame game between the commonwealth and states by agreeing to hospital reforms that continue to split funding and responsibilities.

Section 52 (1) of the Trade Practices Act (1974) states: "A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."

Consider what most voters would think a super profits tax on mining means. I doubt they would think it kicks in on profits capable of being earned in a term deposit.

The tax name is designed to make mining companies look greedy when they complain about it. It should have been described as a resource rent tax. That is what Treasury head Ken Henry called it when he recommended such a tax in his independent tax review.

But the political spin doctors re-branded it a super profit tax. It was deliberate rabble-rousing crafted to be misleading.

In the modern media age, the public is becoming cynical about the role of our elected representatives. The public must carry some of the blame for that cynicism for tuning in to infotainment political coverage. The media must carry some of the blame for dumbing down coverage for ratings. But most of all the politicians should be blamed for over-spinning policies. Rudd is the worst offender.

Peter van Onselen interviews Health Minister Nicola Roxon on Sky News Saturday Agenda, at 8.15am, replayed at 8.30pm.