Prime Minister Julia Gillard is determined to block opposition legislation that would allow thousands more regional students to claim the Youth Allowance.
The bill, passed by the Senate on Thursday, has provoked a flurry of predictions about a looming constitutional crisis.
But a defiant prime minister is adamant the bill won't make it to the House of Representatives, let alone become law.
"This is all blindingly simple at the end of the day," she told reporters in Canberra on Friday.
"It's not constitutional, money bills can only become law in this country if the government agrees to them." Australian Greens leader Bob Brown says it is up to the parliament to decide what to do with the private bill, proposed by Nationals senator Fiona Nash.
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"This is a matter for politicians to settle," he told reporters.
Ms Gillard accused Opposition Leader Tony Abbott of being "grossly irresponsible" for allowing the bill to be brought to parliament without nominating how he would pay for its $300 million impact on the budget. "It seems very, very easy for Mr Abbott to find ways to spend money," she said.
"What he's not so good at is finding ways to save money and offset that spending."
Senator Brown agreed, saying any private bill that proposed to spend money should nominate the source of funding.
