Kevin Rudd says a mining tax targeting extraordinary profits is still needed to suppress the value of the Australian dollar and stop the wider economy being distorted.
He told ABC Television's Q&A program last night that the original design of the tax, which contributed to his downfall as prime minister in June 2010, was to stop so-called "Dutch disease".
Dutch disease is the economic concept that links an explosion in resources exploitation with a decline in manufacturing. Mr Rudd said his defunct resource super profits tax concept was not a "mad, leftie, socialist, nutcase tax" but had the deliberate rationale to target sustained and huge profits.
"The whole point of the macro-economic rationale was not simply boosting revenues to do infrastructure projects for the future and other long-term investments, it was also to put a dampener on the massive activities surrounding the Australian dollar coming off the super excited nature of the resources sector, which is killing the rest of the economy," Mr Rudd said. "Unless we are dealing with the dollar systematically through such a taxation measure, then we're going to face these problems in the future as well, in future mining booms."
Former Liberal leader Malcolm Turnbull said using a mining tax to keep the dollar low was a bad idea at the time and remained so.
Appearing with Mr Rudd on the program, he said the best way to keep the dollar in check was for the Government to cut spending so the Reserve Bank could cut the official interest rate.
Both were asked what they would pursue if given a second chance to lead and both denied the premise.
But Mr Rudd said the country needed a mature, national conversation on policy options because political debate had become a "rolling Punch and Judy show".
Economic diversity was the key, with making northern Australia a food basket, materials research and modernised services the priorities.
Mr Turnbull said he would not be leader again and if the Liberal Party was elected to govern next time, he would be part of the collective leadership in a coalition cabinet.