Illustration: John Spooner It is made all the more difficult by the fact that the previous one – which was levied on iron ore and coal profits – would be far more ineffective today than it was back in 2010 when the prices of these commodities were at an all-time high. It made much more sense back then – but the opportunity was lost because the execution by the Rudd and subsequently the Gillard governments was so poor. Today, producers of these commodities are watching profits move backwards as prices fall in the face of either oversupply or wavering demand from our primarily Chinese customers. And state governments are getting particularly upset about the fact that the royalty payments are under pressure. The West Australian government blames the deliberate move by large miners to push the market into oversupply for the falling prices.

The big mining companies like Rio Tinto and BHP Billiton are still making healthy profits but not the super profits they were harvesting a few years ago. Shorten would need to devise a fairly onerous new tax regime to garner a meaningful amount of revenue or settle for a greater tax level more palatable to the industry – like the MRRT, which was effectively a Clayton's tax. A tax that would bolster the government's revenue take at today's commodity prices would certainly trigger another massive anti-government campaign from the well-resourced industry participants. One can almost hear the cries of "sovereign risk" and "killing the goose that laid the golden egg". Shorten says that unlike the flawed introduction of the super tax, his party would undertake serious consultation with the industry rather than hijack it. However, it will be hard to find middle ground that will suit both camps and Shorten is suggesting he wants to be more business friendly in a general sense.

He says he will also take some form of carbon pricing mechanism to the next election – which is another issue that will be fought by some sections of the business community. But there is a broader underlying view from across industry that this is acceptable – if not inevitable. The biggest gripe about a carbon price is that it will represent yet another change in policy and one can only have legitimate sympathy for business given the rules on environmental imposts continue to change and certainty is illusive. Any attempts by the government to introduce additional taxes on the mining industry will become additionally sensitive after the surprise move by China last week to impose new tariffs on coal imports, which will capture those from Australia. The Chinese Ministry of Finance said last Thursday that thermal coal would attract a 6 per cent import tariff and coking coal would be hit with a 3 per cent tariff. Whether trade talks set for later this year between Australia and China can mitigate this impost remains to be seen. Already many Australian coal producers are producing losses and even the low cost producers are struggling with thin margins. The implications of the Chinese move are still being debated and some are even questioning whether the tariffs may also be extended to iron ore.

Thus with the pressure of low prices and potential tariff based cost increases the prospect of harvesting more tax from Australian coal producers would be an exercise in futility. The bottom line is that it is difficult to see what the Labor government has to gain (revenue wise) from the introduction of some form of mining tax. It is clearly a response to what polls as popular with the electorate but the the halo won't last long if – in government – Shorten's party hits a substantial negative backlash from a well-funded mining industry. He will also struggle to satisfy the electorate if the party introduces a mining tax that raises little or no revenue. The reality is that Labor missed its opportunity to take the cream of the super profits the industry was making three or four years ago. It also missed the opportunity to implement an appropriate carbon pricing model. Both could have been achieved if properly executed.

The days of the super profits in the iron ore and coal industry are now behind us and while prices of these commodities will recover over time they will probably never reach the previous peak levels.