Basically, after breaking lots of promises he made before being elected in 2007, he staked his reputation on this "super-profits" tax of the mining industry. Unfortunately for him, the mining industry is very well funded, and launched an advertising blitz against the government. Rudd couldn't renege on this promise as the recent federal budget had included funds obtained from potential receipts from the mining industry, and if the tax didn't go through it would blow a massive hole in the side of the budget.

The Labor party strategists saw the effect this standoff was having on the re-election chances of the party, and with an election due by April next year they got rid of him.