(Transcript from SBS World News Radio)
The federal government is again facing the prospect that major parts of its second budget may be held hostage in the Senate.
Many senators say they will block key budget measures unless the government backs away from plans to stop people claiming paid parental leave from the government and from employers.
And planned cuts to Family Benefit B payments also remain mired in the upper house, casting doubt on the government's ability to get its childcare reforms into law.
Amanda Cavill reports.
(Click on the audio tab above to hear the full report)
The government wants to introduce its $3.5 billion childcare package which it says is a productivity measure aimed at getting people back into the workforce.
Under the scheme, parents would get a single, streamlined payment to help cover childcare costs, including after-school care, once the new system comes fully into effect from July 2017.
But it also wants to stop a scheme which allows new mothers to access taxpayer-funded parental leave as well as any offered by their employer.
About 80,000 new mothers would be affected by the change.
Labor says thousands of public and private sector employees who have bargained away wages to get employer-provided leave will be badly affected.
Leader Bill Shorten says Labor won't support childcare changes at the expense of parental leave.
"Labor is the party of childcare and we have a very good record and we understand and we've set out our principles for childcare and, unlike the Government, we haven't just discovered childcare after a series of opinion polls. For us, childcare should be affordable. It should also be quality and of course we want to make sure that there are enough places for children and it is all of these principles which we'll apply to what the Government's doing but the Government is addicted to trickiness."
Labor and the Greens also say they won't support a 2014 budget measure to cut family tax benefits in order to fund the government's new childcare measures.
The government has planned to cut Family Benefit B payments when the youngest child turns six, instead of 16.
Greens leader Richard Di Natale says he supports improvements to childcare but not at the expense of support to those who need it most.
"The big problem is we're being forced to choose between more investment for one group of parents and taking away money from, for example, single mums through the Family Tax Benefit changes and new mums through the changes to the paid parental leave scheme. We shouldn't be forced to make that choice. We'd like to see the issue of revenue addressed elsewhere. We think there are opportunities through super tax concessions and mining subsidies and so on and that's where the Government should be looking."
If that's the case, the government will need to look to the Senate crossbenches to get its measure through.
Some controversial measures from the 2014 budget are still stalled in the Senate, where the government lacks the numbers to pass legislation on its own.
Independent Senate crossbencher Nick Xenophon says he's open to discussion but things don't look good at the moment.
"I think we need to look at the individual measures, how will families fare as a result of a more generous childcare package. You need to look at that. You need to look at all these measures in toto (together). I can't support reducing the age, having the cut-off going from 16 to six. That's going to plunge a lot of families into poverty. It will cause enormous hardship."
Another crossbench senator says he won't back the government's multi-billion dollar childcare package, but is happy to vote for the family tax benefit cuts.
Liberal Democratic senator David Leyonhjelm has told the ABC extra spending in the form of childcare isn't justified.
"The increase in childcare funding I won't support. I support the trade-off the minister is looking for in terms of reducing the Family Tax Benefit but increasing funding on childcare in the absence of any effort to deregulate the sector, or reduce regulation of the sector which is what's forcing up the costs of childcare that would be a problem for me."
Motoring Enthusiasts Senator Ricky Muir says he's not happy with changes either to the Family Tax benefit or to the Paid Parental Leave scheme.
Palmer United Party Senator Dio Wang says he's not fully committed one way or the other.
More than ten billion dollars' worth of savings from last year's budget are still to pass the Senate and the government will have to compromise if it wants to get its way.
Despite speculation, the government denies it is setting the scene for an early *double dissolution election.
A double dissolution election could be called as late as May next year.
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