Senator Ian Macdonald (LNP -QLD) wears a safety miners shirt during the Mineral Resource Rent tax debate in the senate chamber at Parliament House Canberra, Thursday, July 17, 2014.
Senator Ian Macdonald (LNP -QLD) wears a safety miners shirt during the Mineral Resource Rent tax debate in the senate chamber at Parliament House Canberra, Thursday, July 17, 2014. AAP Image - Alan Porritt

Miners must still pay tax after Abbott's repeal bill fails

THE resources industry must make its next mining tax payment on Monday after the Senate blocked the Abbott government's repeal bill.

Labor, the Greens and crossbench senators stopped the government abolishing the tax, which Labor introduced in 2010, through a vote on Friday.

They were pushing amendments to the repeal bill - which the lower house rejected - to preserve the School Kids Bonus, low income superannuation contribution and the income support bonus linked to the mining tax funds.

The defeat means the Coalition will not have access to about $10 billion in spending linked to the tax which blows a big hold in its budget handed down in May.

The tax will now survive at least until parliament sits again on August 26.

Prime Minister Tony Abbott said on Friday that his government could not continue to fund the "cash splash" the mining tax was supposed to fund because that would not be responsible.

Finance Minister Senator Mathias Cormann said fewer than 20 taxpayers contributed to the meagre revenue raised while more than 125 other miners were complying with the legislation, costing more than $50 million to administer.

"The government will not accept amendments which support these unfunded spending measures remaining in place," he said.

The move comes a day after the Coalition successfully repealed the carbon tax which Mr Abbott says will save households about $550 a year - through electricity, food, gas, travel and other expenses.

Queensland Council of Social Services chief Mark Henley said he expected there would be mixed reaction about the carbon tax change, especially for people living in vulnerable communities in regional areas.

"Some people would welcome the relief given the high levels of cost of living at the moment," he said.

"There would be some people concerned into the longer term that climate change often has the greatest impact for some of the more vulnerable communities.

"Rural and regional areas experiencing drought, sometimes people in outlaying areas more prone to flood.

"There will be some communities impacted by temperature or climate change the most."

Queensland Resources Council chief Michael Roche said the axing would be welcome relief for mineral and energy exporters with the net cost of the carbon tax to the Queensland resources sector approaching $700 million this financial year.

Mr Roche said the Queensland resources sector supported a measured transition to a low-emissions economy, subject to major global emitters and Australia's resource competitors moving in the same direction.



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