Explosive Epstein emails give fresh insights into mining tax smear campaign

A recent file drop pertaining to the late sex trafficking paedophile Jeffrey Epstein has revealed the inner workings of an ultimately successful industry campaign against former Australian PM Kevin Rudd’s proposed mining super profits tax.

In 2010, Kevin Rudd proposed a 40 per cent ‘resources super profits tax’ (RSPT), a cash flow tax to be levied on ‘super’ profits generated from the exploitation of Australia’s non-renewable resources. ‘Super’ profits were to be defined as assessable resource revenue less deductible expenses, including an allowance for capital expenditure.

An email from Peter Mandelson to an individual whose details were redacted, forwarded to Jeffrey Epstein, discussed strategies and talking points in a campaign to steer the media and Australian public against the RSPT.

“The pressure which the industry has applied, with the strong focus on jobs and social impact, is clearly having an effect on a government which is already under pressue [sic],” he wrote.

In the exchange, Mandelson also admitted that there was “no ideological reason” why the mining industry should not pay more tax. He instead argued the campaign should focus on “fairness” based on international standards, and “reciprocity” – the quid pro quo the government could offer the industry in exchange for higher taxes.

“I would suggest that you start to accept that there is no ideological reason why the industry should not be making a greater contribution to society, especially given the constrained economic times,” Mandelson wrote.

“But that this should be done on the basis of fairness … and reciprocity (what is the government going to offer the industry in return for increasing your tax bill).”

He also urged the email recipient to steer the conversation away from mining companies’ political donations funding opposition parties, adding he didn’t want the public to start questioning “who governs Australia” – elected representatives, or mining companies.

“I see that some in the government have accused the industry of being politically motivated (e.g. funding opposition parties),” Mandelson wrote.

“I would keep well out of that and encourage colleagues to steer away from it. You do not want to turn it into an issue of "who governs Australia", the voters and their elected representatives or the mining companies.”

In another set of correspondence forwarded to Epstein by Mandelson, between two redacted parties, a specific media case study was spotlighted.

In 2010, mining company Xstrata announced the suspension of $586 million in expenditure for two mining projects in Queensland. The announcement fuelled widespread media coverage and was held up as “the most definitive evidence to date of the impact of the Resources Super Profit Tax.”

“The overall tone of the coverage reflected many commentators' view that this announcement marked a turning point in the debate and attention turned to the impact of the tax on jobs and mining communities,” the correspondence noted.

“Political and business commentary pieces all reflect a general view that the PM is losing the battle, and needs to force a compromise.”

The emails also detailed a "strategy" which included encouraging community members, contractors, suppliers and all those who could be affected by the RSPT to "speak up in public, allowing Xstrata executives to step back from the headlines to some extent and to maintain the focus on the potential impact on the man on the street.”

Following sustained media pressure, the Gillard government replaced the proposed RSPT with the minerals resources rent tax (MRRT) in 2012. This was later scrapped by the Abbott government in 2014.

According to the University of Melbourne, mining companies spent $22 million on their campaign against the RSPT.

“[The campaign] was such a success that it’s now become routine for industry groups to threaten a 'mining tax style campaign' every time they don’t get their way with government,” University of Melbourne academics Joo-Cheong Tham and Yee-Fui Ng wrote in 2022.

According to a 2021 Parliamentary Budget Office (PBO) analysis commissioned by the Greens, Rudd’s original RSPT would have increased the fiscal balance by $33 billion and the underlying cash balance by $34.6 billion over the eight years from July 2012 to 2020.

Resource rent taxes are also highly efficient, generating minimal economic harm per dollar raised. A 2025 working paper by Chris Murphy, an academic at ANU’s Tax and Transfer Policy Institute, concluded that resource rent taxes caused economic benefits per dollar raised.

When taxes are increased, they typically generate economic harm, known as the marginal excess burden (MEB). Murphy found that the top personal income tax rate had an MEB of 76 per cent, meaning that a 1 dollar tax increase would cause 76 cents in economic damage.

In contrast, Murphy found the PRRT had a negative MEB of 8 per cent – in other words, increasing the PRRT by 1 dollar would generate 8 cents in economic benefits.

“Taxing normal returns to capital in a small open economy such as Australia does considerable
economic harm. … The economics of taxing location-specific economic rents are very different. Such rents are generated by natural resources, such as land and minerals, and by oligopoly power,” Murphy explained.

“By definition, rents are payments over and above what is needed to keep a factor of production in its current use. Thus, in principle, a tax on such rents is fully efficient because it does not reduce the supply of the factor of production that is being taxed.”

Following the latest Epstein file drop, UK Prime Minister Keir Starmer has demanded that Mandelson be stripped of his Lord title.

Mandelson appears frequently throughout the Epstein files and has been linked to the disgraced financier as far back as 2002. On Sunday, he resigned from the UK Labour Party to avoid causing “further embarrassment” after the files revealed he had allegedly shared confidential government information, including UK tax policy plans, with the late paedophile.