In a shock development, the Palmer United Party (PUP) has voted in support of Labor and the Greens to defeat the carbon price repeal legislation. We understand that PUP was unable to reach agreement with the Government over their proposed amendments which were designed to ensure that carbon price reductions flowed through to electricity and gas customers.

This result means the Clean Energy Act 2011 and associated legislation will remain in place for the time being. Given that the carbon price repeal legislation has now been voted down twice, this sets up a double dissolution trigger for the Government.

We understand that the Government is proposing to reintroduce the legislation into the House of Representatives on Monday, but our current understanding is that it could not be presented to the Senate next week if PUP insists on its amendments being included. This would mean the Senate would not be able to vote on the repeal legislation until Parliament reconvenes on 26 August.

Today’s decision has significant consequences for liable entities and others impacted by the carbon price and we will aim to produce a more detailed analysis on the implications for circulation tomorrow.