BlueScope Steel will not see the remaining $80 million to be paid to it under the Steel Transformation Plan, the incoming federal government has confirmed.
The $300 million plan was part of the former Labor government's moves to compensate high-polluting trade-exposed industries for the effects of the carbon tax.
But the timing of the payment - starting with a $100 million advance to BlueScope in early 2012, well before the carbon tax commenced - meant it acted as a rescue package for Australia's stricken steel industry.
Under the plan, $180 million was to go to BlueScope and $120 million to SA-based OneSteel (which has since changed its name to Arrium).
But on Wednesday a spokesman for incoming treasurer Joe Hockey confirmed to the Mercury that the steel plan would go.
"There will be no carbon tax; there will be no need for compensation," he said.
The Coalition had not hidden this - this year both leader Tony Abbott and finance spokesman Joe Hockey said their policy was, "If you don't have a carbon tax, you don't have to have compensation". But much of the compensation paid to families will stay in place.
BlueScope does not appear concerned by the shift, with a statement to the Mercury indicating the steel maker was comfortable with the new policy.
"We support the Coalition's policy to repeal the carbon tax," a spokesman said.
"The Coalition has said for some time now that industry programs related to the carbon tax would be repealed once the carbon tax is repealed."
Questions from the Mercury about the effect on the company's finances of not getting the $80 million were not answered.
The STP was announced as part of the carbon price package in July 2011. Government and industry sources described how the assistance package was calculated to be the amount required to cover BlueScope's carbon tax bill.
By 2012, the STP was no longer being referred to as part of carbon tax compensation, but was painted as a necessary package to help the steel industry transform to survive difficult trading conditions.
Also in line for the axe under the new government will be compensation paid to the coal industry to assist with its carbon bill.
The NSW Minerals Council, which had warned of job losses caused by the carbon tax, was not concerned about losing the compensation, happy the carbon tax would go.
"Our industry will be so much better off without a carbon tax," NSW Minerals Council chief executive Stephen Galilee said.
"The limited compensation that was to be provided to some operations in NSW was only to 2017, while the carbon tax burden was to be in place forever.
"When the carbon tax goes it is logical that the limited compensation would also go," Mr Galilee said.