Senate defeats carbon tax repeal bills but government will try again

THE Coalition will have to reintroduce bills to repeal the carbon tax after Clive Palmer blocked the legislation in the Senate.

CLIVE Palmer’s decision to block the repeal of the carbon tax is costing families and businesses $11 million every day and could destabilise financial markets, the government says.

The Abbott government will on Monday reintroduce legislation to abolish the carbon price, after the Palmer United Party’s three senators voted with Labor, the Greens and the Australian Motoring Enthusiast Party’s Ricky Muir to block the repeal in the Senate.

The repeal will “hopefully” pass both houses of parliament before the Senate rises next Thursday, the government said.

Senate government leader Eric Abetz said the government would overcome today’s “technical” problem by agreeing on PUP amendments ensuring power price cuts are passed on to consumers.

Environment Minister Greg Hunt said the carbon tax needed to be repealed “to ensure that the electricity markets are given the outcome they have predicted”.

“The electricity sector has acted in good faith and there is an importance to proceed quickly and swiftly,” Mr Hunt said.

“At the moment, every day is an $11 million cost in power bills to Australian families and businesses, but it is also important that the markets are given the certainty and we are hopeful and we believe that it is necessary that these bills should be passed by the end of next week.”

PUP senators Glenn Lazarus, Jacqui Lambie and Dio Wang sided against the government to defeat the repeal bills by a margin of 37 votes to 35.

Five other crossbench senators — independent Nick Xenophon, Family First’s Bob Day, Liberal Democrat David Leyonhjelm and Democratic Labour’s John Madigan — voted with the government.

It is the second time the package of repeal bills has been rejected in the Senate, providing the government with another double-dissolution trigger.

Greens senator Sarah Hanson-Young summed up reaction to the vote and events leading up to it with a one-word tweet: “Wow’’.

Today’s dramatic developments came after a curveball thrown this morning by the PUP’s leader, Mr Palmer.

The government had hoped to have the carbon tax repeal bills passed by lunchtime.

But its plans were thrown into disarray when Mr Palmer announced his three senators would not vote with the government because his party’s amendment to ensure all savings were passed on to consumers had not been circulated to senators.

“When you give an amendment it normally goes to the clerk’s office by 8.30am and then it’s circulated. So our amendment didn’t do that,’’ Mr Palmer said this morning.

“Our senators went into the Senate thinking that our draft had been circulated when they hadn’t been, and they then brought on the … guillotine and then our senators would have sat in the Senate and voted on the amendment they thought was circulated, which they hadn’t circulated, and then they thought they would have had that conned.”

Mr Palmer said it “could have been” an attempt at deception, although “you never want to underestimate the incompetence of the Abbott government”.

The PUP had initially backed a government-drafted amendment addressing its concern that companies might fail to cut their prices after the carbon tax repeal.

However, Mr Palmer described the amendment as “a whitewash”. He wanted firmer deadlines in the legislation, including a requirement that companies pass on all savings before July 2015, or face a fine equivalent to 250 per cent of what they have saved.

It’s believed some proposed Palmer amendments were later withdrawn.

Liberal Democratic Party senator David Leyonhjelm, who votes on economic issues in a bloc with Family First’s Bob Day, warned he might vote against the new Palmer United amendments because they were “very proscriptive”.

“They have extremely high fines for failure to lodge documents and, you know, it really is going beyond the reasonable,” Senator Leyonhjelm said.

“We haven’t had a chance to get a good look at them. The first we saw of them was five minutes before we’re being asked to vote on them.”

Labor said after initially wanting to fast-track debate, the government had been forced to filibuster in the Senate while it negotiated with Mr Palmer.

“It certainly takes a special blend of arrogance and incompetence to seek both to guillotine and filibuster in the same debate,’’ Labor Senate leader Penny Wong told parliament.

Tony Abbott, speaking before Mr Palmer’s announcement, stressed the legislation included “more funding and stronger powers to ensure that the removal of the carbon tax does mean a commensurate reduction in prices”.

“The Coalition committed to scrap the carbon tax, just about all of the crossbench senators committed to scrap the carbon tax, so this is a day for people to keep their commitments,” the Prime Minister said.

Mr Palmer said the new amendments were lodged with the Senate clerk’s office at 8.30am.

“We asked that it be distributed and we had a violent action from government, a violent reaction I would say,’’ Mr Palmer said.

“We had ministers calling us and visiting our senators and complaining.’’

Mr Palmer defended his party’s earlier move, arguing the PUP changes ensure savings would be passed onto consumers.

Anticipating the passage of the repeal bills, Mr Abbott had pledged an immediate drop in electricity prices after the Labor scheme was scrapped.

“The carbon tax is a 9 per cent impost on power bills, it’s a $9 billion a year handbrake on our economy, it’s a $550 a year hit on the average household’s costs,” Mr Abbott said in Perth.

“Getting rid of the carbon tax is good news for families, it’s good news for business, good news for jobs and good news for prices.”

CARBON TAX REPEAL — HOW THE SENATE VOTES PLAYED OUT:

For repeal:

— Coalition (31)

— Family First’s Bob Day

— Liberal Democratic Party’s David Leyonhjelm

— Independent Nick Xenophon

— Democratic Labour Party’s John Madigan

Total — 35

Against repeal:

— Labor (23)

— The Australian Greens (10)

— Palmer United Party (3)

— Australia Motoring Enthusiast Party’s Ricky Muir

Total — 37

With Stefanie Balogh, AAP