Coalition shock loss on union-busting bill
The Morrison government has suffered its worst week since the May election, ending with its union-busting Ensuring Integrity Bill blocked by the Senate.
The Bill failed after One Nation's Pauline Hanson blindsided the Coalition by taking her two votes to the Labor side.
Voting with the Greens and independent Senator Jacqui Lambie, the move ensured the Bill was locked 34-34, and therefore failed to pass.
The shock loss came at the end of a bruising week for the government, with three days of controversy surrounding Energy Minister Angus Taylor's release of dodgy documents massively overstating the City of Sydney's travel costs, which is now the subject of a police inquiry.
Prime Minister Scott Morrison was also dragged into the saga after he called his friend, NSW Police Commissioner Mick Fuller, about the inquiry.
The government had been confident the unions bill would pass after it secured the two votes of the Centre Alliance, and agreed to amendments put forward by Senator Hanson.
But after being heavily lobbied by union members brought to Canberra by the ACTU, and having several discussions with Labor leader Anthony Albanese, Senator Hanson voted against the Bill, which would have allowed unions to be deregistered and rogue officials disqualified.
The Queensland Senator said the government had "taken me for granted'' and did not know how her party would vote until they took their seats on the same side as Labor.
"I listened to the people,'' she said.
Labor called the vote a win for workers.
"The Senate has not accepted the attack on working people and their representatives," Senate Leader Penny Wong said.
Senator Lambie's no vote came despite her earlier vow to support the legislation if controversial union boss John Setka did not resign, which he has not done.
The Coalition had invested significant capital into the Bill, which would have given it more firepower to take on militant unions like Setka's CFMEU.
Senator Lambie said she wanted Mr Setka removed from the union movement but the government's failure to accept her proposed amendments would not have achieved that.
"I had to make a call whether to support a Bill that makes out like teachers, nurses and firies are as bad as the CFMEU ... There's no need to put everyone in the firing line,'' she said.
Labor and the Greens had denounced the Bill, saying it was draconian and would allow unions to be deregistered for "paperwork breaches".
Centre Alliance backed the Bill after negotiating with the government to attach a three-strike demerit point system for unions and officials.
"Obviously I am very disappointed in the result in the Senate,'' Attorney-General Christian Porter said.
"We remain committed to this reform and will be seeking to reintroduce the bill at an appropriate time.''
LAMBIE HITS OUT AT MEDEVAC RUMOURS
Crucial Senate crossbencher Jacqui Lambie has refused to confirm or deny reports she will help scrap the controversial medevac laws if refugees being held offshore are sent to New Zealand.
"I've had 10 journos put to me unsourced rumours about what I've proposed to the government - but I can't comment on any," Senator Lambie tweeted.
"Only three offices know the condition - mine, the PM's and the minister. Everyone else is just speculating."
Senator Lambie has said she will support the Morrison government's push to unwind the medevac laws on one condition, but has not said what that is.
"The condition I have put to the government is a sensible and reasonable proposition, that I have arrived at through extensive consultation," she said in a statement on Wednesday.
"I am aware that it is within the capacity of the government to accept it."
Sources close to negotiations between Senator Lambie and the government have told Nine newspapers her vote could be secured in return for accepting the New Zealand deal.
New Zealand has long offered to take 150 refugees per year from Australia's offshore processing centres in Papua New Guinea and Nauru.
The coalition government has always refused to take up the offer, claiming it could trigger an influx of asylum-seeker boats.
Home Affairs Minister Peter Dutton has said Australia will consider taking up the New Zealand offer "when and if" it would not encourage more boat arrivals.
The medevac laws, which passed against the government's will earlier this year, gave doctors a greater say in granting medical transfers to sick refugees being held offshore.
About 500 refugees and asylum seekers remain on Nauru and in Papua New Guinea.
- with AAP