The mining tax may not be killed off after the Palmer United Party, mirroring its horse-trading over the carbon tax, said it would not support the abolition without major concessions from the Abbott Government.
PUP's Senate leader Glenn Lazarus said yesterday unless measures worth $2.4 billion this financial year were kept, his party would not back axing the tax.
"The Palmer United Party will only support the abolition of the mining tax on the condition that three key low-income support measures are retained," he said.
The party is demanding that the Government keep the low- income superannuation contribution, the income support bonus and the SchoolKids bonus, which combined are worth $9 billion over the forward estimates.
Since it resolved to abolish the mining tax in 2010, the coalition has said any measure funded by the tax had to be axed.
It is understood the Government is standing by this position.
Without support from PUP's three senators and alliance member Ricky Muir from the Motoring Enthusiast Party, the Government will not have the numbers to axe the mining tax.
It also faces a bigger Budget blowout, with the Liberal Democrats' David Leyonhjelm proposing amendments to keep a string of business incentives tied to the tax, including the small business instant write-off.
If those proposals win the support of Labor, the Greens and PUP, the Government will face another $3.5 billion hit.
Mr Palmer said he expected the mining tax Bill would be broken up to enable his party to vote down the tax but keep the spending measures.
However, that will still leave the Government facing a major shortfall in its Budget.
WA Chamber of Commerce and Industry chief executive Deidre Willmott said it was vital the mining tax be axed.
"We're very disappointed by this development," she said. "WA mining companies have been working on the basis that the mining tax would be repealed as soon as possible.
"This was a promise of the coalition parties and PUP, so we expect that promise to be honoured."
The Government struck a deal with PUP last night to keep the Government's contentious Future of Financial Advice regulations in place, conceding some minor paperwork changes.
It prompted Labor's Sam Dastyari to claim a "Liberal, National, PUP coalition" was in charge of the Upper House.
The Government is hoping there will be a vote today on abolishing the carbon tax.
Mr Palmer, who sat in the Senate during the vote on the financial advice laws, is facing criticism from other MPs about his treatment of Senate staff.
Independent Nick Xenophon labelled Mr Palmer a "coward" for comments he made about Senate clerk Rosemary Laing.
It was Dr Laing, a longstanding member of the Senate respected by both sides of politics, who raised concerns about the constitutionality of PUP amendments to the carbon tax.
Mr Palmer said Dr Laing should "get out of her job".
"She can't interfere and stop them from doing it - that's what it boils down to," Mr Palmer said.
"Otherwise, you get a bureaucrat being able to veto legislation and we don't want that. That's what happens in Stalinist Russia."