Labor has confirmed it will oppose changes to a remote work-for-the-dole program, believing the adjustments do little to fix the "discriminatory" scheme.
The Greens have also rejected the changes, leaving the government with a very tough task getting its plans through parliament.
More than 80 per cent of participants in the Community Development Program (CDP) are indigenous.
The controversial welfare initiative has for years been dogged by concerns its participants are hit with repeated financial penalties and forced to work much longer hours than city-based job seekers.
A recent ABC analysis showed the higher the indigenous participation rate in a region, the higher is the rate of financial penalties issued.
The coalition wants to shift participants in the CDP onto a nationally-consistent compliance framework, slapping those who miss appointments with demerit points and fines.
The government also intends to reduce work requirements, ease demands on medical evidence and relax incoming reporting rules.
However, there are concerns the compliance rules were designed for urban and regional Australia, and do not take into account the particular circumstances of jobseekers in remote communities.
Labor is worried introducing the national compliance framework to remote communities will do further harm to Aboriginal and Torres Strait Islander people.
The Labor caucus agreed to oppose the legislation at a meeting in Canberra on Tuesday.
Opposition senators are urging the government to redraft the changes in consultations with indigenous Australians, their representative organisations and other stakeholders.
The government has until Thursday morning to table a final evaluation report into the scheme after the Greens passed an order for the production of documents in the Senate.
Greens senator Rachel Siewert said parliament was being asked to consider legislation without knowing how the program was working.
"What is the government trying to hide? The government is sitting on the final evaluation of CDP, which they have admitted is complete," Greens senator Rachel Siewert said.
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