The opposition has won round one but the stoush over South Australia's controversial bank tax is far from over.
The state government has vowed to pursue the levy, included in this year's budget, arguing its part of a suite of measures that also deliver tax cuts for small business and grants for people buying apartments.
But the Liberals remain firm in opposing the impost with leader Steven Marshall declaring the "massive new tax" will never make it through parliament's upper house.
"There is no chance this bill is going to pass," he told reporters on Thursday. "We're going to block this tax."
The levy was rejected by a single vote in the upper house late on Wednesday, which returned it to the lower house with a recommendation it be removed from the wider budget measures bill.
That recommendation is expected to be rejected by the government with Labor using its numbers to send it back to the Legislative Council for a second vote.
Premier Jay Weatherill said the opposition had supported the major banks at the expense of local companies.
"Steven Marshall had a choice. Back small business tax cuts, or back the big east coast banks," he said.
"He chose the big banks."
The premier also pointed to Thursday's announcement by the National Australia Bank of plans to cut 6000 jobs as it unveiled a $5.3 billion profit as justification for the government's stand.
The NAB is among the big banks that will be slugged by the SA levy which seeks to raise about $360 million over the next four years.
Mr Marshall said the bank's job cuts were disappointing but reinforced why it was important not to do further damage to the SA economy with another tax.
The Australian Bankers' Association welcomed the rejection of the bank levy in the upper house as a great result for the people of South Australia.
"It's now time for everyone to accept the will of the parliament and put the tax behind us," chief executive Anna Bligh said.
SA's peak business body said the "deeply unpopular tax" should not be reintroduced in any form.
"This bank tax was a bad idea and we need to encourage investment rather than kick consumers," Business SA chief executive Nigel McBride said.
