Mining tax to stay ... for now ... after PUPs refuse to budge on keeping associated spending

IT got a win with axing the carbon tax, but the Abbott government hasn’t had the same luck with the mining tax. And it has Palmer United Party Senators to blame.

BUSINESS: BUSINESS: Coal is stockpiled in preparation for loading onto ships for export at the Newcastle Coal Terminal in Newcastle, north of Sydney, Australia, on Wednesday, Sept. 8, 2010. BHP Billiton Ltd. and Rio Tinto Group declined in Sydney trading after Australian Treasurer Wayne Swan signaled the final terms of the government's planned mining tax may depend on talks with independent lawmakers. Photographer: Ian Waldie/Bloomberg

THE mining tax will stay for now, after Palmer United Party Senators teamed up with the Opposition to stop policies like the School Kids bonus — paid for by it — from being axed.

This morning the Senate sent amended legislation back to the House of Representatives on a special Friday sitting of Parliament, but it was rejected.

Senator Eric Abetz moved a motion in the Upper House urging colleagues to help axe the tax without the amendments to keep spending promises connected to it.

But PUP Senators and the Australian Motoring Enthusiast Party’s Ricky Muir again stood firm to keep them with Labor and the Greens — voting 37 to 29.

The Coalition refuses to scrap the tax without getting rid of the associated schoolkids bonus, low-income superannuation contribution and income support bonus, meaning the stalemate continues.

PUP Leader Clive Palmer last week announced he would support axing the tax, but only if the government kept the spending promises connected to it.

Ahead of Senator Abetz’s motion being put, Family First Senator Bob Day insisted he supports getting rid of the mining tax but said he doesn’t support the idea of having one tax pay for one lot of policies.

“The Americans have a saying: ‘That aint no way to run a railway’.

“The budget is $400 billion or thereabouts and the low and middle income payments and superannuation contribution represents less than one per cent of the budget.

“There are lots and lots and lots of savings that can be made,” he said, without dumping such policies.

“We can have both.”

But Senator Abetz said in government you can have “100 people” coming up to you saying “this is only one per cent of the budget, surely you can find the money here” and then somebody else ‘oh, it’s only one per cent of the budget’.

“Do that 100 times and your budget’s gone.

“Everyones one per cent of the budget ultimately does add up.”

The government leader in the Senate said as far as the Coalition is concerned “a vote to insist on the Senate’s amendments is a vote, will be a vote, to keep the mining tax and the people of Australia will be watching very closely as to what we as Senators do.”

Having lost the vote, the government will have to reintroduce its attempt to axe the tax, and the associated spending, at a later time.

After today Parliament does not sit until late August.

Earlier Tony Abbott stood by the Coalition’s position which he said it took to the people at the election.

“We said that we would abolish the mining tax, but we would also abolish the spending that the tax was supposed to fund and you can’t get rid of a tax responsibly without also getting rid of the spending,” the Prime Minister told ABC Radio.

“We wore the opprobrium and unpopularity of saying that the school kids bonus would go because it was a cash splash with borrowed money and it’s all very well ... for people to say these are tough times, but we have to be responsible.”