SHAREHOLDERS, rather than taking the advice of the government to encourage miners to calm down and back off, are right behind the campaign to raise awareness of the stupidity of the resources super-profits tax.

The mining companies' owners delight in the effectiveness of the full-page advertisements being taken out.

Furthermore, a well-funded blitz in the marginal seats in Western Australia will undoubtedly see the desired result.

Queensland is the next most affected state.

With Premier Anna Bligh openly questioning the tax, particularly its effect on liquefied natural gas projects, it is clear the government underestimated both the depth of feeling on this issue and the number of key seats that will be adversely affected.

Extractive industries are the engine of the Australian economy, and their contribution to government coffers has substantially increased over the past decade, with very little protest.

Who would have thought the introduction of a substantial new tax immediately before an election could be a political party's undoing?

Unfortunately, the history played out by the GST saga has been forgotten.

With the opinion polls trending poorly and only months to arrest the slide, this tax threatens to hang over the government all the way through to election day.

Endless rhetoric will not appease. Share prices are down because miners have received the rough end of the stick.

Even Peabody's bid for Macarthur Coal was reduced from $16 to $15, a direct outcome of the super-profits tax.

For the government, action is the only way to recapture the trust of shareholders.

But the government is in a pickle because since the backdown on the emissions trading scheme, not to mention the other initiatives that have come back to bite the government, any reversal of the announced tax will be highly damaging to the reputation of the Prime Minister.

Perceptions that he is a lame duck will not help him in the polls.

It is a pity the super-profits tax misstep will be what moulds shareholder opinion of the government.

In reality, the Rudd government has been relatively shareholder-friendly.

The reform pipeline has been full for many years, and economic management has been exemplary.

Shareholders have seen an unrelenting flow of problems for the past few years and the government has responded.

It gave shareholders a say on exorbitant chief executive termination payouts; it fixed disclosure of short selling in this country; it is going to make sure shareholder class-action lawsuits against companies are available to smaller investors; and it is about to overhaul executive remuneration in Australia.

Voters in BHP Billiton, Rio Tinto and Telstra will no doubt see things differently.

Their view is of a government that does not consult, does not listen, and acts before thinking.

Causing billions to be wiped off the values of these companies does not endear one to a shareholder's heart.

This article by Stuart Wilson, Chief Executive Officer of the Australian Shareholders' Association featured in his weekly Shareholder Opinion column in The Australian on Wednesday, 10 May 2010.