THE consultation on the resource super-profits tax is a bit of a "horse bolted" scenario. Although it rejected most of the proposals of the Henry review, Canberra embraced what the review called a resources rent tax and went about renaming it a resource super-profits tax.

Although there were opportunities for interested parties to submit to the Henry review, there was no opportunity for stakeholders to offer their input on this recommendation prior to it being taken up and announced as an integral plank of this year's federal budget. The current consultation is now restricted in scope as the government is tied to raising the revenue and the miners presented with a fait accompli have been backed into a corner.

The biggest danger inherent in any change of public policy is the risk that there will be unintended consequences. Yes, stakeholders all have their own axe to grind, but consultation -- with all sides of a debate represented -- is the only way to achieve a real understanding of the consequences.

The slanging match of the past three weeks between the government and miners, with the Queensland and West Australian governments, the opposition and the unions wading in, has been very damaging. Mining stocks continue to lose value and it is the ordinary Australians who have invested their own hard-earned funds (both directly and indirectly) who are losing and stand to lose much more.

The bar brawl that ignited over the weekend about the rates of tax paid by miners, likewise, has been unhelpful. What is clear is that the resources industry will be asked to carry a much larger tax burden if the RSPT is introduced. The way the tax is set up will no doubt make investment in resources here much more expensive and, therefore, less attractive to foreign investors.

At least one element of the tax, designed to be attractive to industry, the 40 per cent tax refundability of failed projects, is being widely criticised by industry as being of no benefit. A proper consultation with industry would have informed Canberra that this element was not valued.

Wayne Swan has not assisted by declaring the miners to be "hysterical" about the implications of the tax. But the rates of tax currently attributed to the miners, quoted by the Treasurer, do not include royalty payments to the states or the other state tax: payroll tax. Whether it is appropriate that the royalties paid to the states are replaced by the RSPT, and then an amount paid back to the states, seems to have been lost in the debate.

One of the most sensible voices has been that of Woodside chief executive Don Voelte, who said yesterday: "The key is how to balance the right amount of money back to the citizens versus the economic return on billions and billions of dollars of investment". In order to do what Mr Voelte suggests, Canberra must show some leadership and ensure all of the options and consequences are properly considered.

This article by Stuart Wilson, Chief Executive Officer of the Australian Shareholders' Association featured in his weekly Shareholder Opinion column in The Australian on Tuesday, 25 May 2010.