Australia’s Liberal party has voted down a bill by the Western Australian (WA) Government to increase the royalty tax on gold mining by 50%.

The development comes after workers from the industry assembled at the Parliament House to protest against the government’s decision to increase the tax from next year in order to shore up additional revenue to the tune of A$392m ($305m) to repair the state’s budget.

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Under the proposed policy move, mining companies are required to pay an additional A$20 ($16) per ounce.

The decision taken by the Liberal party comes after concerns were expressed by industry bodies regarding the potential impact on investment and losses caused by the proposed hike.

“It makes no economic sense that the WA Government would want to damage one of the engine rooms of our economy by hitting it with a 50% increase in a major cost.”

Welcoming the Liberal party’s decision, the Association of Mining and Exploration Companies (AMEC) acting CEO Graham Short said: “The decision by the Liberal party room to support a disallowance motion to be moved by the One Nation and Nationals parties will save thousands of jobs in WA’s gold mining, mineral exploration, and wider service industries.”

“It makes no economic sense that the WA Government would want to damage one of the engine rooms of our economy by hitting it with a 50% increase in a major cost, when that only represents 0.2% of the 2017/18 Revenue Budget.”

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AMEC noted that the government’s intention to increase the tax was not in line with its earlier assurance to not implement the 2015 Mineral Royalty Rate Review Report’s recommendations.

Earlier this month, the Chamber of Minerals and Energy of Western Australia (CME) warned that the proposed increase in royalty on gold would result in around 3,000 job losses, based on economic modelling.