The Abbott Government has suffered a minor setback in its signature repeal of the carbon tax.

The Carbon Tax was expected to be eradicated today in the Senate, but a technical glitch has brought about its defeat by 37 votes to 35.

Labor and The Greens voted against the legislation as expected, as did the Palmer United Party (PUP) and Ricky Muir – which was unexpected. This what sealed the fate of the bill.

What happened?

Minister for the Environment Greg Hunt told a press conference this afternoon that the Palmer United Party only put forward the final version of its amendment to the Carbon Tax at 9:15am this morning.

The Clerk’s Office – the experts in charge of giving advice to the Senate – read through the amendment and informed the PUP that it was unconstitutional. This is because it read like an appropriation bill (a piece of legislation authorising the government to spend money, which must originate in the House of Representatives, not the Senate).

According to Minister Hunt, the Government supports the PUP amendment, and still has the support of PUP to repeal the carbon tax.

What is the PUP amendment?

The PUP wants to ensure that all of the cost savings from the carbon tax repeal are passed on to Australian families and businesses.

The Government’s carbon tax repeal legislation already has penalties in place to force companies to pass on cost savings, but the PUP wants to make doubly sure.

Its amendment would force electricity and gas companies to make enforceable statements to the Australian Competition and Consumer Commission (ACCC).

These statements would need to contain a report on the direct and indirect impacts of carbon pricing on their business, and how they will ensure that the cost savings are passed on.

At least, that is how Clive Palmer characterises it.

Greens Leader Christine Milne is concerned that the amendment is written too broadly, and will potentially impose “yellow tape” (the PUP colour) on Australian businesses and individuals beyond the gas and electricity industry.

“These amendments seem to have wide reaching effects, and substantial penalties,” Ms Milne said.

“We’re yet to see how wide reaching these effects will be.”

So what comes next?

The Government has confirmed that this block is a minor setback, and that the process of repealing the carbon tax will simply restart back in the House of Representatives.

Government Senate Leader Eric Abetz told the media this afternoon that a new carbon tax repeal bill, which will include the PUP amendment, will be moved in the lower house on Monday.

Mr Abetz expects the revised bill to pass through the Senate “by the end of next week.”

By this stage, any constitutional issues will have been resolved.