The Abbott government will need to bide its time until the new Senate arrives in July before having any real chance at abolishing the mining tax.
The government on Tuesday failed in its first bid to scrap the minerals resource rent tax (MRRT) in parliament, less than a week after the Senate also rejected its bills to scrap the carbon tax.
The MRRT repeal legislation can’t be put to a vote in parliament for another three months, by which stage it will be just before a fresh wave of senators enter parliament.
It’s expected the new upper house will be less hostile to the government’s agenda than the existing one controlled by Labor and the Australian Greens.
In the meantime, the government is using Labor’s refusal to axe the tax as ammunition in the lead-up to the Senate election re-run in West Australia on April 5.
Industry Minister Ian Macfarlane said Labor and the Greens had committed a “direct assault” on the economy of WA, a strong mining state.
“The mining tax was deliberately designed by Labor as a tax on WA,” he said in a statement on Tuesday.
Finance Minister Mathias Cormann said the mining tax was “designed deliberately” to hold back WA and damage efforts to grow the state economy.
He also described the impost as a “dog’s breakfast”, echoing government criticisms that the tax was poorly designed and failed to raise any revenue.
Treasurer Joe Hockey said the MRRT would be remembered as the worst tax ever designed, a measure designed to generate billions in revenue that instead raised hardly anything.
Labor argued throughout the debate that the mining tax couldn’t be hurting the mining industry if it was raising no revenue, and accused the government of giving its big business friends a tax cut.
The opposition also tried to emphasise the “other measures” attached to the legislation that would go if the tax was repealed, including the school-kids bonus and low-income superannuation contribution.
The legislation was defeated 35 votes to 32.