Hold your nerve, Rudd tells Labor

Mr Rudd told questioning, but not aggressive, Labor MPs the government had gone from "consultation" to "negotiation" with companies.

But the progress he, Treasurer Wayne Swan and Resources Minister Martin Ferguson reported was mixed: things are going well with the coal seam gas industry, but there is little advance with the big mineral companies.

The Government is continuing to indicate that it may do separate deals with different sectors as part of settling its transition arrangements. Mr Ferguson appeared to signal that to caucus.

BHP Billiton is urging different tax arrangements for different commodities. The industry fears the government will divide it by cutting an early deal with the coal seam gas industry but not other major players.

Wesfarmers said yesterday the proposed tax could threaten the dividend it pays to its shareholders.

The mining industry meanwhile will begin today a fresh advertising assault, with spots featuring real people, not actors, raising concerns. The case study-style ads will appear in newspapers and on television and radio.

Parliamentary secretary for Western and Northern Australia Gary Gray warned the controversy needed to be resolved soon.

"Certainly we wouldn't want to have the current degree of debate and uncertainty in play in August," he said.

In caucus, NSW backbencher Steve Hutchins urged a resolution by the end of the current fortnight parliamentary sitting.

Jim Turnour, from the marginal seat of Leichhardt, appealed for discipline, saying leadership talk was unhelpful.

Asked by a reporter why his leadership was in crisis, Mr Rudd said: "Reform is a hard business", with the key being for "governments to maintain their nerve and . . . their unity. The government is doing both."

He told Labor MPs he was pleased the government and the caucus were holding their nerve. All governments faced these difficulties from time to time, and tax reform was always tough.

He was confident that when the community focused on the economic fundamentals that they would prove to be "galvanising points".

Ministers highlighted comments by British Gas as showing that it was having success with the gas industry. The government is also flagging concessions for low-value commodities such as sand.

The mining industry and government continued to exchange shots, with Mr Swan rejecting a claim by Rio Tinto that it had not been consulted.

The industry yesterday flatly denied comments by Mr Rudd that the government had telegraphed its thinking on the tax since 2008.

Deputy Reserve Bank Governor Ric Battellino argued yesterday that managing inflationary pressures associated with the mining boom was "quite a challenge".