Labor is poised to win its battle to tax the profits of big coal and iron ore miners, after key independents bargained for closer checks on coal seam gas projects and a higher tax threshold.
Tasmanian independent MP Andrew Wilkie gave Prime Minister Julia Gillard his support on Monday in return for an agreement to raise the profit threshold at which the minerals resource rent tax kicks in to $75 million, from $50 million, to ease pressure on smaller miners.
NSW independents Tony Windsor and Rob Oakeshott also pledged their support for the 30 per cent tax on coal and iron ore super profits, after winning concessions to address rural concerns.
The government wants to see the legislation pass through the lower house on Wednesday,
Labor still needs the vote of Greens MP Adam Bandt, whose party has a number of amendments but will back the tax so long as any changes don't erode its overall revenue take.
Mr Wilkie said the threshold changes to the tax, which is due to take effect on July 1, 2012, would cut revenue by $100 million over five years.
"It's not a huge increase (in the threshold), but it's an increase that will be helpful for small companies," he said.
Treasurer Wayne Swan said any extra spending measures resulting from the talks with the crossbenchers would be made up for in the coming mid-year economic and fiscal review, expected in early December.
Mr Windsor, who has been concerned about the impact of coal seam gas development on farming and water resources in rural NSW, secured a $150 million pledge from the government to set up an independent scientific body to provide advice on the industry.
The prime minister will also ask the states to sign a national partnerships agreement to ensure that extractive industries such as CSG and coal mining take into account their impact on water resources.
If the states don't agree, the federal government will legislate to create a new trigger in environmental law for federal authorities to step in and demand greater protections.
The government promised Mr Oakeshott it would set up a cabinet-level working group to examine water, soil and food production issues, and ask a current review of the GST's operation to examine the inequity of state mining royalties.
"These arrangements will provide all Australians with greater confidence that projects will be subject to rigorous and objective scientific assessment," Ms Gillard said.
Mr Swan said it was an historic reform which would reallocate wealth from the mining boom to struggling sectors of the economy, cut the corporate tax rate, provide a boost to superannuation and fund much-needed infrastructure projects.
The tax is forecast to raise $7.7 billion in its first two years, helping the government return the budget to surplus by 2012/13.
The starting threshold for the tax will rise to $125 million over time, meaning only 20 to 30 firms will pay it.
Greens leader Bob Brown said it was in the public interest for the tax to reap as much revenue as possible, given that last year Ms Gillard dumped the bigger model proposed by former prime minister Kevin Rudd in the wake of a fierce advertising campaign by the mining industry.
"We are going to ensure that the public interest be upheld here. We will no doubt be talking about this with government in the coming day or two," Senator Brown said.
"It's up to them to make this a revenue-neutral arrangement."
Another independent, Bob Katter, said he had not decided how to vote on the legislation.
"We'll make up our mind right at the death," he said.
Opposition Leader Tony Abbott says the coalition will consider any amendments the independents propose to the legislation.
"But whatever happens, we will be opposing this tax in opposition," he told reporters.
