CONSIDERING HIS OPTIONS: Fairfax MP Clive Palmer.
CONSIDERING HIS OPTIONS: Fairfax MP Clive Palmer. DANIEL MUNOZ

Palmer’s threat to pollution handout

FAIRFAX MP Clive Palmer has vowed to use his party's critical power in the Senate to stop the repeal of the carbon and mining taxes if the Abbott Government proceeds to link its direct action environmental plan to the Federal Budget.

The three-year, $1.5 billion plan aims to pay Australia's major polluters for their efforts at reducing emissions - a scheme opposed by Mr Palmer, who described it as "hopeless".

The repeal laws have been rejected once before, so another rejection by Palmer United Party senators, along with Labor and The Greens, could trigger a double-dissolution election.

Mr Palmer argued the introduction of the direct action plan should be a stand-alone piece of legislation, while Environment Minister Greg Hunt countered that the allocation of funding for the scheme was a normal part of the general budget process.

However, Mr Palmer described the linking of the two pieces of legislation, and associated warnings of a constitutional crisis if the laws were voted down, as "blackmail".

"If the Government does this, we will reconsider our position on repealing the mining and carbon taxes and this would create the potential for triggering a double-dissolution election," Mr Palmer said.

"After the recent Senate re-election in Western Australia, I don't think the Federal Government would want this because they would be on very shaky ground.

"The tide is turning against the major parties because the Australian people are sick of being taken for granted."

Mr Hunt has remained firm on the Government's plan of action, arguing it had a mandate to remove the carbon tax and to implement the direct action plan.

Mr Palmer said money budgeted for the direct action plan should be allocated instead to areas such as the aged pension.