WATCHING the resource super-profits tax imbroglio, one must pity the poor shareholders. Their tax dollars are paying for the government's campaign, and their investment dollars are paying for the miners' response.

Politics has also moulded the opposition's response to the planned tax. The Liberals see the need for clear differentiation as the over-riding objective, and have therefore run with the line that the proposed tax -- in any form -- should be rejected.

It is most likely that the miners, Minerals Council and other industry bodies have not spent $100 million, or even $38m, on their awareness campaigns -- yet. However, if current spending is maintained through to the election, there is a good chance that the ad bill will be astronomical.

While the tax in its current form is unworkable over the long term, changes could be made to make it more palatable for both miners and the electorate.

Had the government bothered to go through the process of truly consulting with industry, it could have avoided the fallout it is now copping. Lowering the 40 per cent tax rate, increasing the profit threshold to better reflect risk, dropping the retrospective nature of the tax and ensuring a balance between federal and state levies are all major changes, but necessary ones.

The miners ought to be able to live with these substantial concessions and the government's polling numbers would start to recover. Not to mention that these are all substantial improvements.

Sitting down with public servants who are not able to discuss the big picture is particularly frustrating. It all ends up being a one-sided expression of views and no clarification of uncertainties.

That the tax does not take effect until 2012 is irrelevant. Much has been made of the fact that miners have been lining up to announce project deferral and cancellations, with accusations of political point-scoring. These announcements, however, are required by law and have a negative impact on companies' share prices -- which is the last thing an executive wants. But projects are planned years in advance, so it's natural to be considering their viability now. The uncertainty caused by this tax has had a marked impact on the project pipeline for the next few years.

That the new project pipeline continues to deliver is of critical importance to the Australian economy. It would be disastrous to see Australian miners hobbled, while the mining boom is in full swing and there are historically high commodity prices on offer.

That it may subsidise an impoverished mining industry when the cycle turns downwards is no consolation.

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 8 June 2010.