Prime Minister Malcolm Turnbull been forced to stomach a partial victory on company tax cuts and a compromise on race-hate complaints.
As the lower house adjourned for the pre-budget break on Friday, the government reached a deal in the Senate with the Nick Xenophon Team on a corporate tax cut worth $24 billion for businesses with turnovers under $50 million.
However, it was soured by the failure to deliver a broader tax cut worth $50 billion - the centrepiece of the coalition's economic plan taken to the 2016 election - and the rejection of proposed changes to Section 18C of the Racial Discrimination Act.
Mr Turnbull hailed the watered down tax package as a "stimulus to growth and employment" and a great day for Australian workers and businesses.
"Today we have delivered a tax cut for over three million small and medium businesses," Mr Turnbull told reporters in Canberra on Friday night.
Mr Turnbull insisted his government would press ahead with the full package at a later date.
"The job is not over," he said.
In order to get the deal over the line, the government promised single people receiving the aged pension, disability pension or parenting payment will receive a one-off $75 payment to help with power bills, with couples receiving $125.
As well, a solar-thermal plant in South Australia would be supported, a study conducted into a gas pipeline connecting SA and the Northern Territory and new national energy policy would be rolled out to force down power prices and make electricity more reliable.
The tax cuts will cost $5.2 billion over four years with a medium term cost by 2027 of $24 billion.
"Both the NXT and the government are focused on making sure that we have both economic policy and energy policy settings in place to ensure our economy is as competitive internationally as possible," Senator Mathais Cormann said.
Labor senator Sam Dastyari said NXT had been sold a pup.
"It's a bunch of reviews - a few things the government had to do anyway," he said.
The government had a bigger defeat in regard to proposed changes to race-hate laws, with the Senate only accepting changes to the way the Human Rights Commission handles complaints.
However, Attorney-General George Brandis described the changes as the most significant in two decades.
"The procedural changes agreed to will ensure that the Human Rights Commission will never again be able to be used to prosecute ordinary Australians who merely want to express their right to free speech," he said.
The coalition failed in its attempt to change the words "offend", "insult" and "humiliate" in Section 18C of the Act to "harass and intimidate".
The chairman of an inquiry into the changes, Liberal MP Ian Goodenough, said once the process changes were completed the government should "at an appropriate time seek a fresh electoral mandate to amend section 18C".
Labor leader Bill Shorten said Mr Turnbull should rule out any further changes.
"There is no freedom of speech crisis in this country," he told parliament.
"This incompetent, divided, out of touch government are wasting over a million dollars of taxpayer money today keeping us all here on a speculative ideological crusade designed just to keep the prime minister in his job as he appeases the bullies in the right wing of his party."
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