The Greens have boosted Labor's chances

There are several points that, for the non-rabid, fairly jump out of the past two days' news cycles. To list them briefly: Labor is not finished; the Greens have done Julia Gillard a favour; Kevin Rudd is looking more mud-spattered than before; and Tony Abbott is in a perilous position vis-a-vis the mining industry. 

The last three points are all to do with the mining tax, but the first is obvious if you have not yet been bitten by the foamy-mouthed dog that seems to have been let loose in the Canberra press gallery. 

Labor's poll position is dire, granted. But just as Michelle Grattan, then writing for The Age, was premature in calling for Julia Gillard to step down as prime minister back in May 2012, the same newspaper's Mark Baker went too far in his Tuesday opinion piece which began: "For the greater good, Gillard must go, Rudd should be reinstated and an election called immediately."

Polls are a useful indicator of which direction a party is going, but directions change, as John Howard showed after the Tampa crisis in 2001. Howard recovered from a Liberal primary vote of 27 per cent in March 2001 (three points lower than Labor's present primary vote) to be at 37.4 on election day in November 2001.

The conventional wisdom is that it would take something like the Tampa crisis to turn things around for Labor. Perhaps. But there are also forces at work in the electorate that could make a Labor recovery more gradual than the dramatic Tampa turnaround – and mining is at the heart of these. 

The first feeds into point number two above – that the Greens have done Labor a favour. Christine Milne's dummy-spit over Labor's apparent decision to put big mining companies ahead of everyday Australians is founded upon the outdated notion that miners are super profitable. Yes, they were when the mining tax was created, but BHP Billiton's profit has halved and Rio Tinto has just recorded a $3 billion loss. 

But what Milne has done is whip up anti-mining sentiment – if you don't like corporations, billionaires and Clive Palmer mouthing off about every topic under the sun, vote Greens.

What most have missed, however, is that disgruntled Labor votes who shift to the Greens will come back as preferences in most seats. The Greens/Labor nexus is like a balloon held in the middle with two hands – squeeze at one end, and it balloons out at the other, but the amount of air in it doesn't change.

Or does it? I discussed this with prominent psephologist Charles Richardson yesterday and he believes a small fraction of Australia's large uncommitted vote could actually pump the balloon a bit bigger. The reason is simple – if you loath fat-cat miners, then the Coalition is doing least of all to confiscate some of their caviar. It doesn't want any additional tax on the miners. And though Labor's tax to date has raised very little, it will at least raise a bit more when/if the mining giants return to profitability. A report released yesterday by the Reserve Bank suggests the full-year figure will rise from the current $126 million to around $700 million, which is at least several times what the tax costs to administer. 

Let's move on, then, to the third point: Kevin Rudd looks more mud spattered than ever. I base this assertion on an excellent article by The Age's Peter Martin (perhaps he should get a guernsey writing their front page political opinion pieces too?) today showing that had the Rudd version of the mining tax been in place, the government would currently be lumped with a bill for around $4 billion dollars, as part of the 'public equity stake' arrangements of the RSPT. 

This just shines another spotlight on how badly Kevin Rudd, Wayne Swan and their chief adviser Ken Henry bungled the RSPT (and for the sake of consistency, let me point out that I have argued several times in favour of a higher tax take from the mining sector than the MRRT has delivered – but that is not the same as being a fan of the complex structure, and over-the-top tax rates of the RSPT). 

Beside springing the RSPT on an unsuspecting industry rather than consulting in the customary manner, they too-cleverly hitched the federal budget to a pro-cyclical revenue stream. In good times, when the budget looked healthy, we'd have pots of money to spend. In bad times, when there was nothing left, we'd be paying the miners billions. 

It was the autocratic style of the Rudd cabinet that allowed that fiasco to unfold – something for which Rudd deserves more criticism than does Julia Gillard for the cynical 'quick fix' she negotiated after Rudd's departure (though that also was a travesty of democracy that deserves plenty of criticism in its own right).

But whatever breaches of democratic principles led to the creation of the MRRT, from a pragmatic point of view, it is a profits-based tax that the miners can live with and that will, eventually, produce a revenue stream similar to the petroleum resource rent tax that has operated since 1987. 

As long as Gillard resists pressure to make the MRRT more heavy handed, the miners will not move their well-funded advertising and lobbying efforts into the hostile battle formation we saw against the RSPT in 2010. 

And Gillard is digging in her heels in this one. It might not be a great tax, but it's her tax, and it's staying – with the substantial weight of the AWU behind her. 

AWU secretary Paul Howes this week reminded the prime minister that "we've got your back", and has also promised to mobilise thousands of AWU members in key marginal electorates to help highlight some of Gillard's successes – such as the small matter of having some of the best economic indicators in the developed world. With Howes and fellow king-maker Bill Shorten behind her, Gillard will stare down attempts to take the populist step of raising the MRRT rates or cutting depreciation allowances for mining investments. 

All of which leads on to the final point: Tony Abbott is in a perilous position vis-a-vis the mining industry. 

No, the miners won't come after Abbott – he's the guy who will remove the MRRT forever. But those swing voters who, largely irrationally, hate mining fat-cats will be a weak point in the Abbott defences.

Labor will work hard to paint Abbott as the best friend the fat cats can have. And though mining has propped up the economy, and the wealth it has generated underpins the jobs of many of those swing voters, Labor has a powerful weapon to use against the Coalition. 

Milne will take the extreme mining-haters, and feed preferences back to Labor – because to preference the conservatives would cause long-term damage to the Greens movement.

Labor will take the more moderate mining-haters. And Tony Abbott will take none. 

Mining will be just one of the major battles fought in the run-up to September 14, but it will be significant. 

But then we might not hear many of these issues canvassed at all in the months ahead. The Rudd-maddened media pack is too busy running around in circles and barking at shadows.