Mining tax passes final hurdle

THE government last night secured a major plank of its reform agenda, when the Senate passed the $10.6 billion mining tax by 38 votes to 32.

THE government last night secured a major plank of its reform agenda, when the Senate passed the $10.6 billion mining tax by 38 votes to 32.

The Greens combined with the government to push the tax through, despite their strong criticisms of the legislation as too weak and the failure of their amendments.

As the battle in the Senate drew to its end, Liberal frontbencher Mathias Cormann predicted the tax would ultimately be thrown out by the High Court, just as the government's attempted Malaysia solution had been.

Passage of the tax which the opposition has pledged to repeal will give the government greater ammunition to attack Tony Abbott over his refusal to agree to the company tax cut from 30? to 29? that it will finance.

The Greens have said they will support the company tax cut for small business, but vote with the opposition to deny it to bigger business, when legislation is introduced in the budget session.

Prime Minister Julia Gillard said yesterday it was "a truly remarkable thing" that the Liberal party would vote against a tax cut for business.

Asked if she was trying to negotiate to get the tax cut through, Finance Minister Penny Wong said: "If my counterpart Andrew Robb wants to pick up the phone and say to me, 'Penny, let's have a discussion that would allow us to pass the company tax cut', let him do it."

The opposition had previously said it was for tax cuts but now it was saying it was going to vote against them, she said.

Mr Abbott has promised a "modest" company tax cut under a Coalition government but will not put an amount on it.

The mining tax, which was scaled back by the Gillard government after it helped bring about the downfall of former PM Kevin Rudd, will start on July 1.

It is struck at a 22.5 per cent effective rate and applies to profits of coal and iron ore producers above $75 million.

The Association of Mining and Exploration Companies continued its criticism of the tax, saying it was "simply unfair to smaller emerging miners". It was "so complex that the administrative and compliance burden on industry and government will be extreme".

As cross words flew in the Senate last night, Greens leader Bob Brown criticised advice from the Clerk on the Greens' proposal to extend to tax to gold and uranium.

Liberal frontbencher Michael Ronaldson accused him of being "a gutless piece of work. You are attacking the person that we have put in here to protect ourselves."

Superannuation Minister Bill Shorten said the boost from 9 per cent to 12 per cent in compulsory superannuation that is part of the package meant that "millions of Australians won't retire poor in the next 20-30 years".

The Coalition has pledged it would keep the superannuation change despite voting against it last night.

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