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The Structural Power of Business and the Power of Ideas: The Strange Case of the Australian Mining Tax

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  • Stephen Bell
  • Andrew Hindmoor

Abstract

In 2010 the Australian federal government fought and lost an intense and very public battle with the country's mining industry over the introduction of a new 'super-profits' tax. The proposed tax was withdrawn and the Prime Minister, Kevin Rudd, was removed from office. Why did the government lose this battle and what can this episode tell us about the nature and determinants of business power? We argue that business power is not an objective condition but is shaped subjectively and inter-subjectively. What counts in the power equation is not whether business investment is essential for growth or whether business will disinvest if a new tax is imposed, but whether actors believe this to be the case. One reason why the structural power of business varies is because actors' normative and causal ideas about the value and determinants of business investment vary. In the Australian case ministers did not believe that the introduction of a new tax would jeopardise investment. Ministers did however come to believe that the mining industry had successfully persuaded a large number of voters that the introduction of a new tax would jeopardise investment, employment and growth. This is why the tax was eventually abandoned.

Suggested Citation

  • Stephen Bell & Andrew Hindmoor, 2014. "The Structural Power of Business and the Power of Ideas: The Strange Case of the Australian Mining Tax," New Political Economy, Taylor & Francis Journals, vol. 19(3), pages 470-486, May.
    • Handle: RePEc:taf:cnpexx:v:19:y:2014:i:3:p:470-486
    DOI: 10.1080/13563467.2013.796452
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    References listed on IDEAS

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    1. Culpepper,Pepper D., 2011. "Quiet Politics and Business Power," Cambridge Books, Cambridge University Press, number 9780521118590, Enero-Abr.
    2. Culpepper,Pepper D., 2011. "Quiet Politics and Business Power," Cambridge Books, Cambridge University Press, number 9780521134132, Enero-Abr.
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    Cited by:

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    2. Paster, Thomas, 2015. "Bringing power back in: A review of the literature on the role of business in welfare state politics," MPIfG Discussion Paper 15/3, Max Planck Institute for the Study of Societies.
    3. Tuck, Penelope A.L. & de Cogan, Dominic & Ormeño-Pérez, Rodrigo, 2024. "Devolution, counter-conduct and territoriality: The case of Tax Business Rates in the United Kingdom," The British Accounting Review, Elsevier, vol. 56(6).
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    7. Adrian Rinscheid, 2020. "Business Power in Noisy Politics: An Exploration Based on Discourse Network Analysis and Survey Data," Politics and Governance, Cogitatio Press, vol. 8(2), pages 286-297.
    8. Adrian Rinscheid, 2020. "Business Power in Noisy Politics: An Exploration Based on Discourse Network Analysis and Survey Data," Politics and Governance, Cogitatio Press, vol. 8(2), pages 286-297.
    9. Ormeño-Pérez, Rodrigo & Oats, Lynne, 2024. "The making of problematic tax regulation: A Bourdieusian perspective," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 99(C).
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