Divisions appear to have cropped up in the ruling Labour's nascent alliance with a kingmaker independent MP over plans to make mining firms pay more tax, exposing the fragility of Julia Gillard's minority government which can be brought down by a single defection.
A day after extending his crucial support to Labour for government formation, rural independent lawmaker Tony Windsor today flagged a disagreement with the reasurer over the mining tax.
Under the deal to get the support of Windsor and another independent Rob Oakeshott for government formation, Gillard, the first woman prime minister of Australia, and Treasurer Wayne Swan had promised to hold a public summit of tax experts by June 30 next year to discuss options for tax reforms.
But, Swan today said the tax would not be on the summit's agenda because the government was in the process of designing the measure and preparing legislation for parliamentary approval.
Windsor, who gave Labour one of four crossbench votes it needed to form government, had specifically wanted the minerals resource rent tax to be discussed at the forum.
With the support of independents, Labor now controls 76 seats in the 150-member House of Representatives following the August 21 cliffhanger polls, with the opposition Coalition of Liberal party leader Tony Abbott having 74 MPs.
However, Swan said Labour was committed to the tax and a panel chaired by former BHP Billiton chairman Don Argus was looking at it in greater depth.
"...the mining tax is going through the process that we outlined prior to the election," he said.
Expressing surprise at Swan's remarks, Windsor said, "That's the first time I've heard of that."
"I thought it was going to be included in any discussions in relation to taxation and the Henry (Tax) Review," he said.
Swan, in his remarks on the issue, further said Windsor and the independents will have views about the design of the tax, which they can express to the government "but we have to move forward with legislation."
He said that he had held productive talks with Windsor about the tax in the past and that he would be working with all the independents and minor groups in Parliament on the issue, regardless of the decisions taken by them yesterday over which party to support.
"It's very important that we do build a consensus behind major reforms, so essential for the future of our country," Swan said.
The treasurer also expressed hope about the smooth functioning of the new Parliament and said Gillard was well placed to handle the legislative challenges the government would face.
"I think one of the lessons the prime minister and the government has learnt from the last period in power is that we have to spend more time talking to the community, building that consensus.
"And I believe Prime Minister Gillard is uniquely placed to build that consensus. She did it with the Fair Work Act. She did it with the resolution to the mining tax. And we are going to have to do that again and again, given the numbers in the Parliament," he said.
Gillard, who assumed power 10 weeks ago in a party revolt, had proposed a new 30% headline tax rate on the profits of iron ore and coal firms, a watered down version of an original proposal which was severely criticised by the industry and opposition parties leading to the ouster of then-prime minister Kevin Rudd in June.
The prime minister yesterday staked claim to form a new government after the two kingmaker independent MPs extended support to her Labour party, giving it a wafer-thin one-seat majority in the first hung Parliament in Australia in nearly 70 years.
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