The Mining Tax has been once more rejected by the Senate. This means it will stay at least until late August, when Parliament is due to reconvene. Clearly frustrated with the latest defeat, Tony Abbott told ABC Radio, “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’ get rid of a tax responsibly without also getting rid of the spending.”

And it is this spending that is proving the obstruction to the removal of the tax.

The Palmer United Party today sided with the opposition to reject the repeal of the mining tax on the grounds that the policies it funds should remain. Senator Eric Abetz went so far as to push a motion to remove the tax while still committing the government to upholding those policies.

Prime Minister Tony Abbot. Photo: www.smh.com.au

Prime Minister Tony Abbot. Photo: www.smh.com.au

But the Coalition demanded the schoolkids bonus, low-income superannuation contribution and income support bonus be repealed in association with the mining tax.

When it came the Coalition lost the vote 37 – 29.

All sides of government support the removal of the mining tax; in that all parties are in agreement. But questions over the need and effectiveness of the policies it funds are proving a major hurdle for the government.

On the other side, this latest defeat in the Senate will come as a blow to businesses who have already adjusted their budgeting and marketing in expectation of the repeal. Business uncertainty will only serve to reduce further ventures and stifle economic growth.

The government now has a little more than a month in which to produce a new strategy.

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