Mining tax repeal passes with budget hole

The Senate has torn a large hole in the government's budget after voting to repeal the mining tax but keep spending measures paid from its revenue.

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(AAP)

The government has got its mining tax repeal but at a big cost.

Finance Minister Mathias Cormann repeatedly warned that senators who insisted on expensive measures funded by the mining tax were effectively voting to keep the impost.

Nevertheless, the school kids bonus and the low income bonus were saved from the trash can.

These measures are worth billions to the Abbott government's budget bottom line.

Senators also voted to keep Labor's timetable for increases to compulsory superannuation contributions.

"There is no way that we can afford to keep billions and billions of dollars worth of unfunded promises," Senator Cormann told the upper house on Thursday.

"Any senator voting to amend the mining tax to keep Labor's unfunded spending promises attached to it is voting to keep the mining tax."

Palmer United Party senator Jacqui Lambie said the loss of the income support and school kids bonuses would punch a hole in the budgets of "ordinary Australian battlers".

The amended legislation will go back to the House of Representatives where the government has the numbers to quash the changes.

This was the Abbott administration's second stab at abolishing Labor's mining tax after the Senate blocked its repeal in March.


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