• Australian Attorney-General George Brandis (AAP)Source: AAP
Changes to race-hate speech laws have hit a Senate road block in what critics say is a win for multicultural Australia.
31 Mar 2017 - 8:48 AM  UPDATED 31 Mar 2017 - 8:54 AM

Controversial changes to race-hate speech laws are dead in the water following a marathon late night Senate debate.

The Turnbull government failed in its attempt to change the words "offend", "insult" and "humiliate" in Section 18C of the Racial Discrimination Act to "harass and intimidate".

The government had also sought to tweak the Human Rights Commission's complaints process, but the fate of those changes is still up in the air.

The attempt to re-word the section was killed off by a Labor amendment to the bill, 31 votes to 28.

Critics dubbed the result a win for multicultural Australia but Attorney General George Brandis said it was a "sad day" for free speech.

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The government was accused of dragging out the debate on the bill while behind the scenes negotiations were still underway with the Nick Xenophon Team over the next item on the Senate's agenda - the company tax cut package.

Debate on the gutted bill was adjourned until a later time.

The Senate eventually adjourned just after midnight (AEDT) on Friday and will resume sitting at 9am.

It's unclear whether the Senate will return immediately to the bill or move straight to the tax cuts.

Senator Brandis argued during the debate that it was a hallmark of a free and democratic society that all members have a right to voice their opinions.

"If we do not believe in freedom of expression for people we despise, we don't believe it at all," he said.

Senator Brandis outlined all the "deeply offensive and insulting" instances other senators had called him a white man and said the spirit of the late cartoonist Bill Leak had presided over the debate.

Mr Leak died of a suspected heart attack in March, after coming under fire for a controversial editorial cartoon about indigenous parental neglect.

He was investigated for a possible breach of 18C but the racism complaint was subsequently dropped.

Greens senator Nick McKim argued the human rights watchdog had "begged" Mr Leak and The Australian newspaper to submit an 18D defence, which allows exemptions for artistic work and fair comments on matters of public interest.

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Senator McKim claimed they refused because of an ongoing vendetta.

"All the arguments about what terrible a trauma this whole thing was for people at The Australian and Mr Leak is premised on marshmallows," he said.

Veteran Liberal Ian Macdonald said Mr Leak might not have died had the government pursued changes to 18C in 2014 before former prime minister Tony Abbott took it off the agenda.

Labor senator Jacinta Collins said there was no popular support for the 18C changes, while, Pauline Hanson used the debate to declare Australians were not racist.

Senator Bernardi said 18C was being used by the left to shut down debate and the process attached to investigate alleged breaches was "rotten to the core".

WATCH: 'Reverse racism': Hanson on 18C

AAP