The mining tax is now a proven flop and should be dumped, West Australian Premier Colin Barnett says.
Treasurer Wayne Swan revealed on Friday the contentious Minerals Resource Rent Tax (MRRT) only raised $126 million in its first six months of operation.
It was forecast to raise $2 billion over the full 2012/13 financial year.
Mr Barnett was a vocal opponent of the MRRT's predecessor, the Resources Super Profits Tax (RSPT) when it was announced in May 2010.
The RSPT was originally estimated by the federal government to raise $10.5 billion between 2012 and 2014.
Mr Barnett was also unimpressed with the watered-down MRRT, which was hastily cobbled together in the week that followed Julia Gillard's rolling of Kevin Rudd as prime minister.
"This tax is a flop in terms of raising revenue," Mr Barnett said on Friday.
"It is a very poorly designed tax in so many ways and while it may not be raising that much in revenue, it is having a damaging effect on the mining industry because it is discouraging investment and affecting future jobs."
In launching the Liberals' election campaign this week, Mr Barnett vowed to continue fighting the tax, along with the state's diminishing share of GST revenue.
Mr Swan blamed the lower-than-predicted MRRT revenue on global economic instability, commodity price volatility and a Australian high dollar.