The Abbott government has set its sights on repealing the carbon tax next week after a political shambles and constitutional hitch foiled this week's bid, embarrassing the prime minister.
The government will bring its repeal bills back to the lower house on Monday after further talks with the Palmer United Party (PUP), which derailed its plans in the Senate despite Tony Abbott's expectations it would be scrapped on Thursday.
The three PUP senators sided with Labor, the Greens and Australian Motoring Enthusiast Party's Ricky Muir to vote down the repeal bills.
It had looked set to pass.
Mr Abbott had agreed with PUP leader Clive Palmer to guarantee electricity and gas price cuts were passed on to consumers and businesses.
But Mr Palmer revealed on Thursday he had more changes to his own party's amendment, which would impose tougher penalties on entities that did not pass on the savings within a short time frame.
One key change was a penalty of 250 per cent of the saving that had not been passed on.
Mr Palmer was told the change breached the Australian constitution, which states the Senate "may not amend any proposed law so as to increase any proposed charge or burden on the people" - in other words, not introduce revenue-raising measures.
But the PUP leader argued the government had "double-crossed" his party.
The government had moved to fast-track debate on the bills, setting an 11.50am deadline for a vote, but instead ended up filibustering as it negotiated with Mr Palmer outside the upper house chamber.
"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.
Environment Minister Greg Hunt later said the government had agreed with the Palmer amendments and would make the changes on Monday in the House of Representatives, where the constitution allowed such measures.
Mr Hunt denied Mr Palmer's claim that coalition senators had reacted "violently" to the amendments, which were withdrawn by PUP at the last minute.
The government has invited PUP to work with them on the amendments at the weekend to get them ready for Monday.
"We can achieve this outcome and I don't see there should be any impediment because we were willing to support the amendments today," Mr Hunt told ABC TV on Thursday.
"We do need to do this and need to do it quickly."
However, new crossbench senators Bob Day and David Leyonhjelm might not vote for the Palmer amendment because they see it as an unfair impost on business.
If they vote against it, the government and PUP will need the support of two other crossbenchers - Nick Xenophon and John Madigan.
Mr Hunt said the government remained committed to axing the carbon tax and passing on savings averaging $550 a year to consumers.
Greens leader Christine Milne said the Senate had been treated with contempt.
PUP Senator Jacqui Lambie said the Liberal Party was treating her colleagues like "dummies".
"But you know what? What we've done, we've actually embarrassed them," she said.
Business groups and electricity retailers want the carbon tax repeal passed as soon as possible but are concerned about the extra administrative burden of the Palmer amendments.
