Australia passes controversial carbon tax

The legislation would force about 500 of the biggest polluters to pay for each tonne of carbon dioxide they emit.

The tax is central to the government's strategy to combat climate change, but the opposition says it will cause job losses and raise the cost of living.

Australia is the world's largest coal exporter and is one of the biggest per capita greenhouse gas emitters.

"Today is a significant day for Australians and the Australians of the future who want to see a better environment," Prime Minister Julia Gillard said before the vote.

After her Clean Energy Bill 2011 was passed with 74 votes for and 72 against, she hugged colleagues and waved to supporters in the public galleries.

The victory is an important one for the prime minister, whose popularity with voters in opinion polls has been declining against the opposition.

The bill is unpopular with many Australians. Thousands of people have protested against it, accusing Gillard of lying before last year's election.

Gillard made a pledge during last year's federal election not to introduce a carbon tax.

The proposed tax was drawn up after Gillard failed to win an overall majority in parliament at the polls and had to rely on the support of the Australian Greens.

The carbon tax and a companion bill for Australian $300m ($298m; £191m) in assistance of the Australian steel industry are expected to pass in the senate with the assistance of the Greens next month.

Australia's 500 heaviest polluters will pay Australian $23 for each tonne of carbon emissions, and households will be compensated through tax cuts or welfare increases for any increased costs.

It will be introduced on 1 July next year, and will then evolve into an emissions trading scheme three years later.

The conservative opposition leader, Tony Abbott, has promised to ditch the tax if he wins office.