PERTH (miningweekly.com) – The Australian resources industry has welcomed the news that the federal government had secured the necessary votes to abolish the minerals resource rent tax (MRRT).

The Senate failed to abolish the MRRT earlier this year, with the Australian Labor and Greens parties banding together to maintain the tax. By July, the Senate voted to scrap the tax, but not before amending the legislation to save associated spending measures.

The government did not accept the changes to the legislation, and the tax remained in place.

However, Finance Minister Mathias Cormann said on Tuesday that the government had struck a deal with six crossbenchers to repeal the tax, including the Palmer United party led by industry heavyweight Clive Palmer, with the repeal passing with 36 votes to 33.

The Western Australian Chamber of Minerals and Energy (CME) rejoiced at the news, with CEO Reg Howard-Smith saying the abolition was a significant achievement and delivered on one of the Tony Abbott government’s key election commitments.

“The removal of unnecessary taxes such as the MRRT and carbon tax will assist the resources sector in becoming more internationally competitive,” said Howard-Smith.

“The MRRT has been both inefficient and ineffective while adding a significant compliance and regulatory burden to industry.”

The Association of Mining and Exploration Companies also welcomed the news, with CEO Simon Bennison reiterating that the MRRT had been a poorly designed and discriminatory tax that was unlikely to generate the revenue initially intended.

“The repeal demonstrates the government's commitment to reducing the cost of doing business. This will improve investor confidence and create more jobs for Australians.

“We must now maintain stability and certainty in public policy settings for long term business and investment planning decisions,” Bennison said.

Despite the industry’s positive response, the Australian Green’s party has lashed out at the Senate decision, calling the deal with the crossbenchers “tricky”.

“Champagne corks will be popping in mining company boardrooms while Australian workers will face less money for their retirement,” Greens leader Christine Milne said on Tuesday.

“This is not just about the spending measures associated with the tax. Today, Clive Palmer is facilitating Tony Abbott's brutal budget by taking away one of the best opportunities we have to raise revenue from those who can afford to pay.

“We could be raising billions more in revenue from mining companies, but instead the Palmer United Party has joined with Tony Abbott to abolish the mining tax altogether.”

The MRRT managed to rake in only A$600 000 in revenue during the June quarter – only one-half of a per cent of the estimated A$150-million revenue forecast at the Mid-Year Economic and Fiscal Outlook.

The original resource super profits tax announced by then Prime Minister Kevin Rudd, had been estimated to raise A$49.5-billion from 2012/13 to 2016/17. This figure was revised downward to A$26.5-billion over the same period, when previous Prime Minister Julia Gillard introduced the MRRT.

Net revenue from the MRRT at the 2014/15 Budget was expected to total just A$300-million.