PM facing a quandary over fallout
Wayne Swan, Julia Gillard and Martin Ferguson address a press conference after the passing of the mining tax legislation. Photo: Penny Bradfield
Julia Gillard is in a quandary about the fallout from the historic passage of the mining tax through Parliament.
She reckons she has got Tony Abbott backed into a corner over his opposition to using the mining tax revenue to fund a cut in company tax.
She also thinks he won't change his mind - but she hopes he will.
If he does bend, the passage of the tax cuts legislation is assured.
That would be a Labor triumph over its partner in government, the Greens, who are threatening to side with the Coalition to block the tax cuts to big business.
The Greens are pushing for a differential tax system to allow only small businesses to have the tax cuts.
Ministers believe Abbott will decide to quietly allow the tax legislation to pass when it comes into Parliament in the budget session.
They think the pressure from the business community for Abbott to abide by a core principle of the Liberal Party will be strong enough to force this backflip. Here Gillard disagrees.
Abbott voted against the mining tax. He is also prepared to vote against the legislation that redistributes part of the wealth from the mineral boom to companies and Australians who are not directly benefiting.
The Prime Minister's analysis is that if Abbott changes his mind on the tax legislation, then his credibility about opposing the carbon tax will be in doubt.
However she continues to argue strongly that he should support the tax legislation.
She pins this on the logic that he can't factor the revenue into his budgetary calculations, if the revenue measures do not exist.
Abbott portrayed the Queensland election on Saturday as a referendum on the carbon tax.
Well, he knows the expected outcome - a conservative landslide - so why not use it for his own purposes?
The taxes will not go uncontested. Queensland billionaire Clive Palmer is considering a High Court challenge but has pulled out of an anti-carbon tax rally outside Parliament House tomorrow.
West Australian mining magnate Andrew Twiggy Forrest is seeking legal advice about taking the mining tax to the same court.
However, at the weekly meeting of Coalition MPs yesterday, a backbencher who suggested the mining tax was unconstitutional under Section 114 was told to go away and do further research.
Gillard says she is confident of the legal advice on which the tax is framed. The mining tax legislation is vastly different to the bill proposing off-shore processing of asylum seekers that was struck down by the High Court.
The passage of the mining tax is very good news for the Prime Minister, given that it was the key issue in her overthrow of Kevin Rudd.
After two years of negotiation with miners and the Greens, she has finally crashed through.
The confidence delivered from this victory is evident.
Having achieved the passage of the carbon and mining taxes, against the odds, she is dismissive of suggestions that she will fail on company tax.
She told sceptical journalists yesterday she had put up with months of scoffing about the future of both bills but they had just witnessed a ''remarkable fortnight of delivery'' for the Labor government.
''Before we start on a process of months and months of scoffing about whether or not we will get through the company tax cuts, I think I'm entitled to go 'scoreboard' and at the moment it's running more in my favour than yours.''
Ross Peake is Political Editor.