Rudd axing made tax deal easier

CANBERRA - Kevin Rudd's sacking as Prime Minister enabled the Government to make a deal with miners over the contentious minerals tax, Resources Minister Martin Ferguson says.

Rudd's successor Julia Gillard announced last week a resolution to a two-month brawl that had threatened Labor's re-election prospects.

Ferguson said Rudd's downfall at the hands of his Labor colleagues gave the Government greater flexibility to compromise with the industry.

"When you sack a Prime Minister the tone's bound to change," the minister told ABC Television.

"People suddenly put their head down and said, 'Jeez, this really is a real difficult challenge now. We've seen a Prime Minister go. It's our joint responsibility to solve these differences in the national interest'."

Under Rudd, the Government was wedded to a 40 per cent resource super profits tax but after his demise, the Government was able to replace his proposal with a 30 per cent tax on iron ore and coal.

"I don't think anyone expected a Prime Minister to disappear and ... that was a game changer," said Ferguson, who brokered a deal with BHP Billiton, Rio Tinto and Xstrata on behalf of miners.

Parliamentary Secretary Maxine McKew has criticised the "brutish" role that factions played in the downfall of Rudd.

Gillard was able to contest the Labor leadership unopposed after Labor's right faction warlords in NSW and Victoria gathered the numbers for her. But Ferguson said he had no time for the party's political players.

"Those who thought they can bring down a Prime Minister and glorify in it, well they can go and hide in a corner," he said.

Ferguson, who is working with former BHP Billiton chairman Don Argus on tax transition arrangements, said there were mixed views among mining companies about the proposal for an exploration rebate.

"That's why we've referred the issue of exploration to the Argus-Ferguson committee," he said. The reference committee would explore how the rebate could be applied to smaller miners.

"We actually didn't see small and medium-sized miners arguing strenuously for the exploration incentive."

- AAP