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Live. Welcome to the program, I'm

Tracy Bowden sitting in for

Kerry O'Brien who has the flu.

Imposing a hefty new tax on multinational mining companies

to increase the superannuation

savings for mums and dads. You

don't need a political science

degree to see how a measure

like that will play out in the

electorate. The reaction to

the Government's Henry Tax

Review is predictable - outrage

from the superannuation from the miners, warm support

industry and the public. But

along with the polarisation

today were suggestions the

Government has squibbed its

chance for a root and branch

reform of the entire tax

system, and for its part, the

Opposition is far from

guaranteeing an easy path

through the Senate. In a

moment, Political Editor Chris

Uhlmann will talk to an expert

panel, but first his report on

today's reaction to the

Government's plan.

It's Kevin Rudd's plan to

kill the mining boom. Our

resources belong to all

Australians, and Australians do

deserve a fair share. It's

important in terms of global

economic competitiveness. The

Rudd Government is prone to

making large claims. If you

think about reforms of economy

and the economic system in our

significant than any I can lifetime, this is more

think of. And there is no doubt

that the task set for the

reform committee led by

Treasury Secretary Ken Henry

was large. It's set out to

reimagine Australia's tax and

benefit system. It found key

parts were serving the country

well but it was ill-designed

for the future. Australia's

ageing, the world's integration and power are shifting.

Business and technology are on

the march, the environment is

under pressure and our city's

strange to meet population

demands. The Henry Committee

found a complex system with 125

taxes and a benefits regime

that's not up to the job of

making a fairer society. It

says the system has to change

to continue to grow the

economic pie and to have income

growth at every level. The

Henry review painted reform on

a large canvass, but while the

Government's language is

sweeping, its focus is

narrow. Putting $450 per year

into fokts of average workers

right across the nation. At the

heart of the Government

response is a river of gold,

from the new resource tax of

40% on mining profits to kick

in from 2012-13. The

Government has branded it a

resource superprofit tax and it

will raise $3 billion in its

first year and $9 billion in

its second. That will fund a

raft of initiatives, like a $2

billion cut in the company tax

rate as it winds down from 30

to 28%. It's graduated so that

small business gets it in two

years and the rest of business

in three. Small business will

also benefit from changes in

depreciation that will cost $1

billion in 2013-14. The

resources money will also build

a $735 million infrastructure

war chest and over the next 10 years the compulsory superannuation rate will rise

from 9 to 12%. The Government

says that the tax take on the mining industry has been

falling as profits soared. If

our share of profits had remained at the average of the

first half of this decade, we

would have collected $35

billion more between 1999-2000

and 2008-9. Now these are

billions of dollars that the

Australian people have missed

out on. The Government says

this is a tough reform, but

given few voters will suffer,

it's not a tough sell, because

it knows that pumping up

retirement incomes will be very popular.

REPORTER: Are you worried that

the miners will go offshore? Do

you know something mate, one of

the things these people want is decent super for working

families. That's what this

Government's committed to,

going to deliver. We are that's what this Government's

thrilled about this

announcement. It's a stunning

win for Australians and it

means that for people who were worried about their superannuation in the future,

they can be a little bit less

worried tonight. But the mining

industry is livid. It's a

disgrace. The Treasurer should

resign. He's an absolute

failure. We should get rid of

him. Clive Palmer is a large

donor to the Queensland Liberal

National Party. He says he'll

move some investment offshore

and some of his concerns are

echoed across the mining industry. They are already

highly taxed relative to other

nations and this is an

additional tax cost on top and

when your tax take and your

project costs increase, which

they have done certainly in the

oil and gas sector, that can

affect the available capital

for new projects. So they're

definitely worried about

that. Mining stocks plunged on

the back of the plan and the

Opposition says the tax will be

an anchor on the economy. Well,

effectively by putting a major

tax on the resources sector,

the Government is doing the equivalent of giving Ian Thorpe

a ball and chain and asking him

to break a world record in the

pool. But as all the sweeteners

are predicated on passing the

resources rent tax, the

Coalition will be under a lot

of pressure to fall in line. We

will make our decision on any

legislation that comes before

the Parliament when we see the

legislation, but I just want to

make it absolutely crystal

clear that we stand for lower

simpler, fairer taxes. There

are other reforms the Government could be holding

back in its election gift

basket. But for now, it's more

than satisfied with what it's

done. It's probably more

significant than anything in

living memory. And for their analysis of the Rudd Government's response to the

Henry Tax Review, I'm joined by

Mitch Hooke, chief executive

officer of the Minerals Council

of Australia, George

Megalogenis senior writer for

the 'Australian' newspaper and

Heather Ridout chief executive

of the Australian Industry Group. And Heather Ridout you

were on this review committee.

Can you tell us, is this the

largest tax reform in your

lifetime? Certainly the Henry

report, 138 recommendations are

really shaking up Federal-State

taxes and welfare and

retirement incomes. Now that

is an ambitious agenda and it's

a long-term blueprint for

reform. The Government's

response, the changes are

important, significant and far-reaching, but I don't know

whether it's the biggest we've

ever had. Certainly we're not

seeing the abolition of any

taxes, but we're seeing some

new ones introduced or

extended. Some reduced, like

company tax, but I don't think

we should focus on the

hyperbole, we should focus on

the reforms themselves. George

Megalogenis, do you see this as

a big tax reform by the

Government - the Government's response, that is? The

Government claims it's the

biggest tax reform and I was

wondering whether Wayne Swan

was talking about his term as

Treasurer, his term as a

citizen or the time in between,

there's been much bigger

reforms than this one. Going

back to the Hawke-Keating era

the introduction of fringe

benefits tax and personal gains

tax is bigger than this one.

The reduction of the end of top

personal tax rate, the former

Labor Government inherited at

60 cents in the dollar, they reduced that one quite

dramatically and I wonder just

more generally, this idea that

soaking miners to do good

things on superannuation and

for small business counts as

reform in the sense that we

understood it in the past. In

the past there were winners and

losers with reform, but always

a national interest in this

mattery. We were told what the

net benefit would be to the

economy. There isn't a reform

this Government has undertaken,

put reform in inverted commas

in this instance that hasn't

involved a loser. Everything

involves a clear political

message, which is I'm going to

take a bit of money off these

people that don't take vote, in

this case miners, and take the

money and give it to other

people who do votes. Mitch Hooke, is this a big

reform? I'm in the same space

as Mitch. I've seen a lot of reforms that positioned this

economy pretty well, but the

minerals industry and, in fact,

when all Australians get to see

what this really means, we'll

see this as actually the

biggest tax grab we've seen

this in a very long time, not

taxation reform and what really

worries us is that the

Government doesn't understand

the ramifications of the full impact of this on the Australian community as a

whole, not just the mining

industry. We'll come back to that in a moment. Let's concentrate on what's good

about this package and Heather

Ridout, what is good about this

package, of course retirement

incomes are very important? In

terms of what's good about it, the reduction in the company

tax rate is very welcome. Not

as far as what the Henry report

advocated and certainly not as

far as business would like it

to go. I think the small

business changes are good,

extending write-off provisions

to $5,000 I think that's a very

important reform. Again, not

as far as the Henry report

advocated. The early start to

the company tax will be important, although not an awful lot of small businesses

pay company tax, so it's quite

important to understand that.

The superannuation changes... I

mean, when Mitch talks about

the mining industry being the

biggest payer, in mining

industry will have to pay $12

billion upwards to fund this 3%

extra when it's mature and

that's a big cost on business.

We'll seek to sit down with

unions at the time and start to

work out some wage arrangements

that we can trade off some of

these cost increases unless we

can see smart productivity

increases come back into the

economy. The resources super

profits tax, that's a big

conceptual change in the right

direction in the view of many.

I have sympathy with Mitch's

concerns for his members and

they've got to try and work on

the best deal they can get.

But, you know, it's obviously a

very, very important reform for

Australia. George, you're a big

fan of the change to retirement

incomes? I think Labor had

almost written this one off. The previous Howard Government

inherited the super guarantee

at 9% of wages and the Labor Opposition at the time and Geoff Masters made the comment,

first the Shadow Treasurer that

the opportunity to increase

that to 12 or 15%, which was Paul Keating's original reform

goal, had probably passed and

that the money was never going

to be in the Budget to do this

thing again. Now coming into

Government again after 12 years

in Opposition, Kevin Rudd and

Wayne Swan ruled out any change

to the super guarantee in the

first year. They were probably more cautious than they are

today. They didn't want to

impose an additional impost on

small business, left that thing

alone. Coming into the second

Budget of Wayne Swan it was

pretty much ruled out. Now the

thing has come back on the

agenda in the second half of

last year and to get from 9-12

I know they've taken a long

time, pretty much nine years to

get from 9-12, and Paul Keating

was able to do the first 9 in

the space of 10 years. If you

want to measure reform fibre, I

would say the former Labor

Government was obviously a

little more ambitious than this

one is, but still getting from

9-12 is a structural reform and

over the long haul it'll pay

off. There'll be fewer people

on the pension which is one of

the reasons you'd want to do this as the population ages. All this is being paid by

the resources rent tax, why shouldn't the Government

extract all it can get from

what is a one-off, once you've

dug off the minerals they're

gone for good - why shouldn't the Government get a good return for the community?

Snchts it should, it's a

balancing act between

maintaining internationally

competitive and ensuring we

won't revoke the highest tax

regime on the industry in

Australia. There's no shortage

of natural resources around the

world. Australia doesn't have

a monopoly on natural resources

and if we're going to develop

those resources here to the benefit of all Australians

you've got to make sure that we

do it on a platform that's


competitive. You've made

massive profits over the last

decade 250, $230 billion over

the last decade, 52% has gone

offshore, why shouldn't more of

it stay in Australia? Actually,

a lot of it has stayed in

Australia. The real

contribution is the economic

benefit s that accrue to

Australia. Everyone knows

we're the bedrock of getting

Australia through the global

what the Prime Minister is financial crisis, but unlike

saying that only $9 billion

over that decade you're talking

about has gone to governments

in terms of royalties, when you

add in company tax rate and...

I don't know where he got that

figure from, but the real

payment on royalties, in fact

$9 billion was a single year,

then you're up to $80 billion.

These are Access Economics

estimates, they're the figures

that they've given us. That's

what we've paid over the

already and are already decade. So Australians have

benefiting. What we're talking

about here is what you're going

to actually take off the top of

a whole stack of projects that

will be put at risk. If you

put those projects at risk,

then you start to, as they say,

kill the goose that's laying

the golden egg. Heather Ridout,

could this be a) drag on the

economy? Look, I think... I

mean, Mitch is making valid

points for his industry, but

the weight of expert opinion

seems to be in support of this

type of tax. The EconTech

research which lines up against

Access estimates jobs and

output will grow in the

long-term under a tax like

this. Marginal mine also stay

open for longer, new ones open

up. You can have the debate on

both sides and I suspect that's what we're going to have over

the months ahead and this

panel's been established to look at the design, the

transitional arrangements. I

think that's an important move

and I'm sure Mitch and other

industries including the ones

we represent will have a view

ahead do you think George for about it. A reasonable way

the Government to fund what it

wants to promise through a

resources rent tax? Well, they

don't have that many other

options. The Budget as a share

of GDP as a record deficit for

2009-10. They're continuing

this tax reform process at a

time of record deficit. The

original Henry review was

commissioned at a time of

record surplus in 2008, so

obviously the GFC has come in

between the two things.

There's obviously a second

phase of the mining boom upon

us, whether it lasts 18 months

or 20 years is anyone's guess,

so there is some scope there if

you're looking to do these

transactions to take it off the

miners. Mitch Hooke, just

briefly, what's the next move

for the mining industry? We'll

have to contest a lot of the falsehoods that this is all

based upon. I mean, the notion

that we've got foreign

companies that don't bring

earnings back to Australia and

be taxed onshore is

wrong. Thank you all. The resources sector has long

been a pillar of the Australian

economy, and as the Henry Tax

Review indicates, it's only

going to become more important,

but balancing mining growth and

small rural communities isn't

an easy task, especially in

Queensland, where mining is

moving from more remote parts

of the State into more

populated rural areas. Acland

is a tiny bush town that earnt

its place in history as

At the moment, the State Queensland's first Tidy Town.

Government is considering an

application to close it to make

way for open-cut mining. In

anticipation, most residents

have already left, but for one

man, the bonds of home are too

strong. John Taylor reports

from Queensland. When is a

town no longer a town, and when

does the past guarantee a

future? This is the dilemma

facing Acland, and one of its

loyal sons. Acland is a tiny

place about two hours' drive

west of Brisbane. Google Earth

shows what it looked like a few

years ago. Underground coal

mining helped establish it in

1913, and the town peaked at

about 200 people in 1952. Most

people who lived in Acland when

I was a child worked at the

mine. For 57-year-old Glen

Beutel, Acland is home, but now

it's almost a ghost town. He's

the last permanent resident.

One family's packing up and

another renting off him until

he says otherwise. It's a haven

for me. Um... I hadn't had any

plans to move anywhere else,

this is home. What did this

place mean to your mum and

dad? It meant a lot of hard

work. It's where his parents

toiled voluntarily in a local

park for years, to help Acland

become Queensland's first Tidy

Town. Gained a lot of

recognition when it was

established and with Tidy Town success and it was an

inspiration to a lot of other

communities to do more. Most

younger people would have gone

indoors, but they used to work

out in the sun, toil in the

gardens and the parks. Their

whole heart and soul was in Acland. But Glen Beutel is

fighting a future he doesn't

want. Mining gave birth to

Acland, and it looks like it's

going to kill it. We have an

EIS in the system at the moment that's under consideration to

take our operation from a

current 4.8 million tonnes a

year of product, to anything up

to 10 million tonnes a year of

product. The nearby New Acland

coal mine is seeking State

Government approval to expand

its operations to literally

swallow the site of Acland. I

have grandchildren who want careers and while they might

not work in mining, we have to

look after our grandchildren

and children, so my view is

that it is better for the

community, but my view is only

one view and we have an

independent system of

arbitration and that's the

system we have. When the

expansion plan was announced,

most of the people of Acland

sold their homes to the mine.

In 2006, their last hurrah was

a garage sale. Someone said to

me, it's like a flock of birds,

one's taken flight and we've

gone with them. The last ones

are the ones you see squashed

on the roads with the

trucks. After 33 years, Kathy

Greenhalgh left. At her new

home not far up the road, her

and her husband enjoy a garden

full of plants from Acland. We

sort of knew, because there was

a mining lease been there since

1913. See , the school closed

2004. There was only... what

was there, nine, ten children

at the school at that stage, so

it was going downhill. Do you

regret moving from Acland? No,

not really. Not the way it was

and is. Well, I mean, it's

just not Acland anymore. Even

though nearly everyone's left,

the mine's expansion still

needs to pass an environmental

impact assessment. Despite

this, houses have either been

left vacant, moved or

demolished. Acland has largely

disappeared, even before final

approval. Well, given a choice,

I think the heritage in Acland

is significant and I think even

the empty streets is a monument

to the horror that companies

can cause. We purchased a lot

of that land through willing

buyers and willing sellers and

I think with Glenn, he has a

process that he wants to go

through and we'll continue to

negotiate and as I say, try to

resolve those tensions. Mining

is a pillar of the Queensland

economy and with the resources

boom the industry is spreading

into more populated parts of

the State. But for Glen

Beutel, the price of progress

is too much. There are a lot

of other communities that are

covered with mining permits

that are threatened with coal mines and I don't think they

should have to go through this.

John Taylor with that report.

Now to the war in Afghanistan,

where civilian casualties are

rising as more Coalition forces

arrive as part of the military

surge. Officials say more than

170 civilians died in April, a

30% increase over the same

period last year. But the United Nations says that the

Taliban is responsible for most

of the deaths. Coalition

forces have started a historic

push into the volatile southern

city of Kandahar. It's the

symbolic birthplace of the

Taliban and one of the most

dangerous parts of the country.

South Asia correspondent Sally

Sara has been embedded with the

US aim's 97th Military Police

Batallion, the only US troops

to patrol the streets of

Kandahar City.

This is where the war in

Afghanistan will be won or

lost. The southern city of

Kandahar is the heartland of

the insurgency. The people

here have endured more than

their share of violence and

uncertainty. It's enough.

Everybody's hurt enough on both

sides. Vus take the soldiers

and spread them out... US

troops and Afghan police

prepare to patrol the outskirts

of Kandahar. They're trying to

stop the insurgents smuggling

weapons and fighters through

this valley. 'Cause they say

they use a couple of routes to

get to Kandahar City for the

Taliban and one of them is

right through where we're going

to go today. .Danielle Johnson

has been in the army for two

years, she's one of the few

female officers commanding US

officers in Kandahar. Even as

we talk, she's scanning the

streets for explosives and

potential suicide

bombers. Because I know if they

put anything around this area

that they would call - stop,

stop. The Afghan and US troops

don't take any chances. The

biggest danger they face are

suicide attackers and hidden

bombs known as improvised

explosive devices or IEDs.

Bicycles and even donkeys have

been used to carry the bombs.

This man is happy to see the

troops in the area, but says

the Taliban still come here at

night and terrorise the people.

The governor of Kandahar wants

an end to the violence and

intimidation. He survived an

assassination attempt by

insurgents in October last

year. He says both sides have

spilled enough blood and the

time has come for

negotiations. And the

government and the insurgent s,

come and join the government and accept the

constitution. The Coalition

pushing Kandahar won't just mean more soldiers on the

streets. It's all about

reconnecting the local people with the government and

shutting out the Taliban. It's

not like bombing or explosion s

or tanks or artilleries, it's

mostly extending the local

governance from the provincial

level to the district level.

Does he have any traffic

coming over his radio? But many

districts are still not safe.

Every night Coalition and

Afghan troops hunt the Taliban.

So the patrol have just had a

radio message that some of the

Afghan security forces may have come under fire at their

position, which is about a

kilometre away from where the

Americans and the Afghans are

at the moment. So they're just

trying to determine exactly

what's going on. Do they have

any AMPs out there right

now? The patrol is given the

all clear and slips through the

darkness back to its base. US

commanders are expecting more

Taliban attacks as the

Coalition build-up escalates. I

think there is an anticipation

by the enemy that there is

something that's going to go on here and they're kind of

focussed on that. I think they

see Kandahar as an area that

they want to exert influence over. The long-term goal is to

train up the Afghan police and

army to fill the vacuum when

Coalition troops leave, but the

locals are still

inexperienced. To say that

they're ready by the end of

this year to take over, I think

they'll still need Coalition

help by the end of 2010 to do

that, but I think they'll be

further along their way than

they are now. It's a slow

process. Just as US troops

prepare to go on patrol, one of

the Afghan police officers

accidentally fires his weapon,

leaving a bullet hole in the

ground. But the biggest threat is from the Taliban.

TRANSLATION: Taliban treat us

very badly. 15 days ago I

received a letter at my door

telling me to stop working for

the government or they will

kill me. But I want to serve

my country. Lieutenant Johnson

knows how dangerous it is to

take on the Taliban in

Kandahar. One of her com -- comrades lost her leg in

February when insurgents

detonated a motorbike packed

with explosives as she walked

past. Lieutenant Johnson and

her troops rushed to the scene

minutes after the blast. You

have to do your job. The

important thing was getting her

out there and making sure we

had security, so you can't

think about it then. Does it

hit you later? Yes. Lieutenant

Johnson still has three months

of deployment to go. Her

mother and grandmother are

anxiously waiting for her

return back home to

Louisiana. They tend to worry a

lot, but sending them pictures

and that type of stuff eases it

a little bit. Doesn't make it

much easier, but it eases it a

little bit. The next few months will determine whether

foreign and Afghan forces can

take control of the volatile

home of the Taliban.

Sally Sara reporting there from Afghanistan. And that's the

program for tonight. We'll be

back at the same time tomorrow,

but for now goodnight. Closed Captions by CSI

This Program Is Captioned Live. THEME MUSIC Hello, I'm Lydia Lassila. I won a gold medal in aerial skiing at the Winter Olympics in Vancouver. Tonight's program is about another international sporting champion, but his sport is outlawed in Australia. However, in some other countries, is treated like a superstar. base jumper Chris "Douggs" McDougall And as you'll see, for his sporting passion. he's paid a high personal price This is Douggs' Australian Story. So yeah, order will be OPC first,

then you go second, I'll go last. while you're taping off Soon as we land, straight in the van, and head off up there. Too easy, let's do it. out of everyone on the planet, I try and have the most fun

a pretty bloody good job so far. and I reckon I'm doing I'd rather do things legally - Obviously it's a lot easier, a lot less stress. stop me doing what I want to do. But I'm not going to allow it We love to get up to mischief. We love doing dodgy risky things, jumping off cliffs, jumping off buildings and love dodging the law. We're the Robin Hoods of crime. We take from the smart and give to the dumb.