By Phillip Coorey and Elizabeth Knight
THE superannuation industry is preparing to fight back against the mining sector after being encouraged by the Rudd government to help counter what the super funds say are misleading claims about the impact of the resources super profits tax on retirement savings.
The development comes amid the first signs of a backdown by the government in its hard-fought negotiations with the miners.
The Herald has learned superannuation industry representatives had dinner with the Prime Minister, Kevin Rudd, at The Lodge on Monday night where the issue was discussed.
Concerned that the mining industry reaction was doing more to hurt share prices than the prospect of the tax, the funds, in their capacity as large shareholders, are planning to lobby BHP and Rio Tinto to tone down their language, stop making misleading claims and negotiate with the government.
Although the government will not budge on applying the 40 per cent tax to ''super profits'' made from existing mines, well-placed industry sources suggest the definition of a super profit could be lifted from six per cent to 12 per cent for new mines.
The concession, although significant, will not affect tax revenue for the next five-to-10 years and will not appease the miners.
They object to the tax's 40 per cent rate being applied to all commodities, its application to all existing mines, and the definition of a super-profit being at 6 per cent for existing mines.
The Minerals Council of Australia said yesterday any increase of the 6 per cent rate to a level similar to the 11 per cent used for the existing Petroleum Resource Rent Tax ''is not a material improvement''.
The superannuation industry will benefit from the $9 billion annual resources super profits tax. About $1.5 billion will be used to increase the super funds of low income earners and provide concessions to over 50s. A smaller portion will contribute towards the goal of raising the superannuation guarantee levy from 9 per cent to 12 per cent by the end of the decade.
All the superannuation measures will be scrapped if the tax is defeated.
The opposition and the mining industry are in lock-step and the government is facing a well-funded political campaign against the tax. The Opposition Leader, Tony Abbott, said miners paid ''more than their fair share''.
A senior government source said the government would not mind if the super industry started running ads to counter the mining campaign.
''It would be wrong to say we have leant on them. Equally it would be incorrect to say we are not discouraging them,'' he said.
A super industry source said an ad campaign was not in the pipeline yet.
''We're certainly considering what steps we can take,'' he said.
First up, the Industry Superannuation Network has drafted a letter which it wants all member funds to sign in the next few days and to be presented to BHP and Rio Tinto.
Conscious that the campaign needs to be apolitical, the network will raise two issues: It would call on the miners to stop claiming the proposed tax is already hurting individual retirement savings when the European financial meltdown was the key factor.
Secondly, in their capacity as major shareholders, the funds will demand the miners tone down their rhetoric.
The network's chief executive, David Whiteley, said the grim warnings by the miners had done far more to hurt share prices than the prospect of the tax.
''The uncertainty is being created by the mining companies and the resources sector because they don't want to pay more tax,'' he said.
''Industry super funds are losing patience because it is clear that there is an overtly political campaign being waged by the major mining companies and the minerals council.''
Rio Tinto's chief executive, Tom Albanese, and chairman, Jan du Plessis, both used addresses to shareholders yesterday to keep up the assault and paint a grim picture for Rio if the the tax goes ahead.
''There are plenty of investment opportunities globally, and countries with lower, stable tax regimes will be the winners at Australia's expense,'' Mr Albanese said.
They went on to give upbeat long-term assessments for the company.