Truth in advertising

How much government support could $38 million provide? That’s how much the Rudd Government is set to spend on a taxpayer-funded advertising campaign to attack the mining sector’s position on the Resources Super Profits Tax, and push the Government’s own line.

Perhaps the money might have been better spent on 15 or 20 Government grants to help with commercialisation of new technologies. Or maybe subsidies for a few hundred apprentices. Or what about some more training and education programs, to help with our looming skills crisis?

Or how about this idea? Last week, we told you that Australia’s Export Market Development Grant program is underfunded to the tune of about $30 million this year. The money that will be wasted on this Government-funded advertising campaign could have been used to make up that shortfall, and even boost the funding for next year’s grants as well.

Kevin Rudd’s decision to spend $38 million to attack the mining sector and defend his own position on the Resources Super Profits Tax is sending a number of messages to voters – and all of them poor.

For starters, there is the hypocrisy angle. After berating the Howard Government for using taxpayer-funded advertising to push its own messages, Rudd has come out and done exactly the same thing in an election year.

Secondly, it shows the Government has badly lost control of this debate. It must have expected that announcing a big tax on big miners would have been a sure-fire vote winner, but it clearly hasn’t worked out that way. The miners have done a good job at getting their argument across and the squabbling over the data supporting the Government’s decision (or not supporting it) appears to have clouded and confused the issue to the point where Rudd and Co feel their points have been lost.

Thirdly, the advertising campaign suggests the Government knows it has a credibility problem with voters. It backed down on the emissions trading scheme issue and it’s insulation and school building programs have been attacked – it simply can’t be seen to be backing down in the Super Profits tax battle and this advertising campaign is presumably seen as a way of making the point that it isn’t giving ground.

How voters interpret these messages remains to be seen – I do wonder how engaged the electorate is on the resource tax issue, outside of the business community.

But Rudd and his team should realise that from the point of view of an entrepreneur trying to get commercialisation assistance or an export grant, this is going to look like $38 million very badly spent.