In her first press conference after her caucus victory, Australia's new Prime Minister Julia Gillard went as far as she could on short notice in backing down on the resources profits tax, and offering the mining industry a new round of negotiations.



The industry and the heavyweight miners must now grasp the olive branch she has offered, and proceed in good faith to negotiate an outcome that they and the Gillard Government can accept.



Gillard refused to discuss what she said were the ''parameters'' of her proposed new negotiations with the miners about a tax. But she said that the government would:

ENTER into negotiations, rather than the ''consultations'' that were occurring under Kevin Rudd's leadership, with resources minister Martin Ferguson back in the loop beside her new Deputy, Wayne Swan, in the talks.

CANCEL the government's advertising campaign for the tax it had earlier announced:

CALL on the mining industry to show good faith by cancelling its advertising campaign opposing the tax:

NEITHER rule things in nor rules things out of the new negotiations:

MAINTAIN that the government would still require that the miners pay a ''fairer share'' of the wealth the resources boom is generating.



The last comment should not cause too much alarm. At the top of the big mining groups, the concern about the new tax has been about its design and its severity, not about the concept that the tax overall would rise. And the move by Martin Ferguson to the centre of the proposed new negotiations should be welcomed by the miners: he is respected by them, and was not closely involved in the original decision.



Post-coup talks



There is political intent, of course, as Gillard positions herself and the government for an election that could come as soon as August: if the industry accepts her proposals, the negotiations that begin will certainly run into the election campaign and beyond, potentially defusing the war that has been waged since the original tax was announced.



The key test on the government side for whether the strategy works politically will be in Western Australia and Queensland, where its polling shows that the tax is key factor in its loss of support.



But Gillard appears to have made genuine concessions, and to have done so speedily.



It was only yesterday for example, as the coup against him was gathering strength, that Kevin Rudd told parliament that while it was working to achieve a ''balanced'' outcome, ''The government is committed to the framework that it has put forward. The framework is a profits based tax, a 40 per cent tax, a tax that also applies to existing projects and a tax capable of delivering the revenue to meet the government's policy priorities and to broaden the base of our economy.''



With Gillard in charge, that inflexibility appears to have gone, and it is difficult to see how the industry can reasonably ask for more from her at this stage, if it confirms that in new negotiations for a new tax all aspects other than the need for the government to raise more from the industry are up for discussion.



Miners respond



It remains to be seen however whether the industry will present a united and constructive front today.



BHP responded quickly, saying it was ''encouraged by the comments of new Prime Minister Julia Gillard, that her Government will open the doors for negotiation with the objective of achieving consensus,'' had ''immediately asked our agencies to suspend all advertising as a sign of good faith,'' and looked forward ''to working with the Government in this new way to find a solution that is in the national interest.''



But the Association of Mining & Exploration Companies was more aggressive, with chief executive Simon Bennison stating that Gillard must immediately announce the ''complete withdrawal of the proposed toxic mining tax in order to restore Australia's reputation as a safe, reliable and financially attractive place in which to invest".



mmaiden@theage.com.au