Bill Shorten

Welfare cuts sail through Senate as key crossbenchers side with Coalition

File: Crossbench senator Nick Xenophon (left) speaking with One Nation senators Pauline Hanson and Brian Burston in August 2016. Source: AAP

Labor has accused Pauline Hanson of betraying the "battlers" of Australia, as she joins with several other crossbenchers to pass government cuts to the Family Tax Benefit through the Senate.

The Senate has passed a suite of welfare cuts the Coaltion says are needed to fund its childcare reforms, after a fiery debate that lasted until just after midnight on Wednesday evening.

The main savings measure is a two-year freeze on the indexation of the Family Tax Benefit - meaning the payment will no longer increase to keep pace with inflation. 

The government estimates that freeze will save around $2 billion over the next four years. 

While most crossbench senators voted with the government, Tasmanian Senator Jacqui Lambie was vehemently opposed to the cuts.

"You are taking money off [FTB recipients], I don’t give a stuff which way you look at it," she said. 

"While milk goes up and while bread goes up, you are freezing [the rate]. That is what’s going on. That is the truth. So please don’t spin it." 

She joined with Labor and the Greens in opposing the bill. 

The motion was passed 34 votes to 31 after the government secured the support of One Nation and Nick Xenophon's three senators, along with independents Derryn Hinch, David Leyonhjelm and Cory Bernardi. 

Opposition Leader Bill Shorten said the freeze would mean single-income households on about $60,000 with two primary school-aged children would lose up to $440 over the next two years, compared to what they would have received under the current law. 

Labor accused Pauline Hanson of betraying the "battlers" of Australia by voting with the Coalition. 

Watch: Lambie makes heartfelt attack on Coalition cuts 

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"She claims she's a supporter of the battlers but her actions demonstrate - day in, day out - that she has not got one care, not one iota of concern, for the battlers in this country," Labor senator Doug Cameron said.

But Ms Hanson argued that the freeze on indexation was not actually a cut to Family Tax Benefits A and B. 

"They are not losing their benefits, nothing is going to change,” the One Nation leader said.

The Turnbull government had previously tried to convince the Senate to pass a so-called omnibus bill that included both the childcare reforms and more than $5 billion in welfare cuts. 

The two elements were separated after it became clear the combined bill would not win crossbench support, and many of the more controversial welfare cuts were dropped, including a four-week waiting period for young unemployed people wanting to access the dole. 

The bill will now have to clear the House of Representatives, where the government commands a majority, before it can be passed into law. 

The childcare reform bill will also be debated this week. 

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