The Australian mining tax and the political power of business

This article provides a detailed analysis of the Australian Labor government's mining tax, building on recent debates that critique Lindblom's Politics and markets. We argued that the case illustrates the power of big business, in particular the importance of the relative flexibility of large companies, especially in the form of ¿investment strikes¿, although such a strategy is more constrained in the resource sector. We also explore two other key factors. First, we analyse Lindblom's argument that government has resources which big business needs, and suggest that this argument depends on governments being competent in negotiations with large companies. We find that the claim did not apply to the case of the mining tax. Second, we analyse his view that business power owes a great deal to the manipulation of citizens' ¿volitions¿. We find some evidence to support this claim, but again suggest that the failure of the government to effectively make the case for a mining tax helped business.