Phasing out live sheep exports won't be considered by parliament until next year after Prime Minister Scott Morrison's minority government won a vote by the skin of its teeth.
The coalition had 72 votes in its favour to delay the discussion, with independents Cathy McGowan and Bob Katter siding with the government.
Crossbench MP Rebekha Sharkie had attempted to force the government to front the issue on Wednesday, leading to an emotive debate across the chamber.
Ms Sharkie harnessed 71 votes with the support of Labor and the other independents, including former Liberal MP Julia Banks.
The Centre Alliance MP says the industry can't be trusted to manage itself.
"We need to transition away from this industry and actually look at this as an opportunity for industry, for sheep, for farmers and for people living in regional Australia to have good quality jobs," Ms Sharkie told the chamber.
The debate comes after the industry announced a three-month moratorium on the controversial trade, with a halt on shipments to the Middle East in June, July and August next year.
This would prevent shipments during the northern hemisphere's summer when animals face the highest risk of heat stress.
Independent Tasmanian MP Andrew Wilkie says the Australian public is "demanding urgent action" to see the end of the industry.
The Middle East buys three times more frozen sheep meat than live sheep exports, he added.
The independent infuriated former agriculture minister Barnaby Joyce, who said phasing out the industry would hurt farmers, just as cancelling live cattle exports to Indonesia had done.
"People went broke, people committed suicide because the value of their place was destroyed," he said.
"It was absolutely destroyed by the reckless actions of those who did not live on their farms, who did not live in their industry, who did not have to deal with the consequence of the actions of this chamber.
"We are not going to let that happen again."
Agriculture Minister David Littleproud said the wheels were turning on implementing key recommendations of the Moss review into the industry.
"It's important that we are calm and decisive through this, that we predicate our decisions on science, not emotion," he said at the tail end of the debate.
The recommendations include appointing an independent external inspector-general and establishing an animal welfare branch within the department, he added.
Labor has committed to ending the trade if elected to government at next year's federal election, pledging to transition the industry to chilled meat processing.
A vote earlier in the morning was tied 71 to 71, with the Speaker Tony Smith casting his vote in line with parliament procedure to ensure the debate continued.
The tied vote was due to WA Liberal MP Rick Wilson getting kicked out of the chamber during the debate.
