The pair went into the last stage of the event tied on time with Victorian brothers Glen and Matt Raymond, only to fall one-second short at the end of the 32-kilometre-long Phat Lady stage.
Bates and Taylor, running in the colours of event sponsor Red Devil, looked set to overhaul their rivals until they were forced to pass the ailing car of New Zealander Hayden Paddon in a tight section of the final stage.
The delay cost them dearly, but despite narrowly missing second, Bates enjoyed the tussle that saw the top-three drivers end the day separated by just 5.3s after 114km of action.
Earlier in the day the defending champions were forced to call on their vast experience when their intercom failed during Stage 12. Taylor was forced to use hand signals to guide Bates through the final kilometres before they were able to revert to a spare unit.
Championship rivals Simon and Sue Evans claimed the Heat 2 win along with overall victory in Red Devil Rally Queensland, but Bates' resilience and consistency saw him claim the final podium position.
He and Taylor sit just eight points by the Evans duo with two rounds remaining.
Neal Bates - Car #1:
"Unfortunately we got held up by Hayden Paddon in the last stage. It only cost us a second or so, but that proved enough. We wouldn't have beaten Simon (Evans), but such is life. Coral and I had a fantastic day and the whole team is very happy - to drive that hard and end up third is pretty amazing. It was just a really fun day with close competition. The intercom failure was testing and although it has happened once or twice before, I don't want to see Coral using hand signals again anytime soon. I'd like to congratulate the Raymonds who have been doing a great job this year. We took a good haul of points and although Simon now leads, it is still close."
Australian Rally Championship
Red Devil Rally Queensland
Heat 2 - Final Results:
1) Simon Evans - Mitsubishi Lancer EVO 1h10m23.9s
2) Glen Raymond - Toyota Corolla Group N (P) +4.3s
3) Neal Bates - Toyota Corolla S2000 +5.3
4) Ryan Smart - Mitsubishi Lancer EVO +32.8
5) Brendan Reeves - Subaru Impreza WRX +2m24.8
6) Justin Dowel - Mitsubishi Lancer EVO +2m26.7
Australian Rally Championship
Red Devil Rally Queensland
Outright Results:
1) Simon Evans - Mitsubishi Lancer EVO
2) Glen Raymond - Toyota Corolla Group N (P)
3) Neal Bates - Toyota Corolla S2000
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