Labor's phoney war over Rinehart

Not since the 'Brisbane Line' controversy of the Second World War has Australia been so palpably divided into two nations.

That policy, whether or not seriously contemplated by the Menzies government (historians aren't sure), would have abandoned most of the continent in the event of a Japanese invasion. Only the region behind the 'line' from Melbourne to Brisbane was to be defended.

Now, it seems, the tables are turned. It's the south east corner that's being abandoned by a government defending mining interests on the other side of the line – Gina Rinehart's Hancock Prospecting being the test case of whose side the government is really on.

Well, that's the version of reality emerging from the union movement.

Following the government's decision to allow Rinehart's company to import 1700 skilled workers for a planned 8000-strong worksforce on the Roy Hill mine project, the unions went beserk.

Paul Howes, secretary of the Australian Workers Union and perhaps Australia's worst actor, put on a theatrical display (watch it here) in which he demanded to know "what political genius thought this was a good idea?"

For Howes, Labor's decision to give a hand up to the world's richest woman is a recruiting opportunity too good to be missed – hence the histrionics. Howes fulminated: "I thought we were actually attacking these guys at the moment!"

Well yes, but in rhetoric only. The class war comments from Howes, Senator Doug Cameron and Treasurer Wayne Swan might help the union movement sign new members in the south east, but all the while the Gillard government is much more miner-friendly than the Rudd government.

For all the controversy, the MRRT captures only a thin slice of mining revenues and the Enterprise Migration Agreement visa scheme that Labor set up at the 2011 budget is a sensible way to assist with a chronic skills shortage in mining regions.

If Howes' outburst were heeded and EMAs were not rolled out over the next few years, it would be the government's own bottom line that would suffer. Allowing a labour shortage to crimp mine expansion also chokes off potential corporate tax from miners, and whatever can be scraped together through the MRRT mechanism.

While mining revenues flow, there is at least potential to maintain Labor's relatively generous training and education funding – the only way to address the skills crisis in the longer term.

The union rage, which will be voiced again in the Labor caucus in Canberra today, is founded on the idea that laid-off workers in the auto or other manufacturing and service industries, will take up jobs in the resources region – mostly likely as fly-in-fly-out workers. That just hasn't been happening.

And Julia Gillard's announcement of a 'jobs board' web site to advertise the 1700 jobs before Johnny Foreigner is allowed to apply, is based on the even more ludicrous idea that Australia's skilled unemployed don't know the jobs are there. As West Australian journalist Andrew Probyn pointed out on the ABC over the weekend, mining companies are even advertising in bus shelters around Canberra trying to recruit workers. Those jobs aren't secret.

No, the anger being voiced by Left faction and union movement figures is all theatre. There is no threat to wages and conditions under EMAs – foreign workers will work under existing industrial relations settings, and if they are paid less than today's workers it will only be because they are helping to reduce wage inflation across the sector generally.

What is under threat is federal government revenue that could be spent on making us a more highly skilled nation.

The likes of Howes and Cameron no doubt also have one eye on the political landscape beyond the next election. Today's Newspoll shows a small improvement in Labor's primary vote, but nothing like the improvement needed to make a 2013 victory seem possible.

So if Tony Abbott does form government late next year, Howes, Cameron and Labor more generally will have laid the groundwork for a public backlash when Abbott seeks to repeal the mining tax. Not a bad strategy given that public approval of the MRRT is still above 50 per cent, according to Essential Media polling.

Abbott used the Rinehart controversy yesterday to again call Labor a "government at war with itself". Sort of. It's phoney war, but it will become a very real one for Abbott after the 2013 election.