The Federal Government will try today to salvage its $42 billion mini-budget after the Senate blocked Bills to deliver one-off payments to millions of Australians.
Independent senator Nick Xenophon sided yesterday with the Coalition to scuttle the stimulus legislation a decision slammed by business and unions. Family First senator Steve Fielding and the Greens backed the Nation Building and Jobs plan, leaving the votes deadlocked and the laws rejected.
The Senate is expected to vote again today on the measures that are ''urgent and in the national economic interest'', according to Prime Minister Kevin Rudd.
''No other nation's parliament has refused a major stimulus package in the current environment of unprecedented global economic downturn. No other country's parliament except this Parliament, led by this Opposition,'' Mr Rudd said.
Opposition Leader Malcolm Turnbull said the Government's economic policy was in tatters as a result of Mr Rudd's ''intransigence''.
''We have said we would support a package in the order of $15 billion to $20billion so Mr Rudd knows he can get support for a package in order of that level,'' Mr Turnbull said.
''His bulldozer has stalled and he's got to work out whether he wants to stay there stalled in the middle of the road or whether he wants to talk.''
Mr Rudd described the Opposition's decision to vote against the package as an act of economic sabotage that had threatened the jobs, livelihoods and businesses of almost 100,000 Australians.
He pointed to ''sobering'' new figures that show Australia's unemployment rate has increased from 4.5 to 4.8 per cent in January as another 36,800 people joined the ranks of the unemployed. ''It is a sign of what is to come,'' Mr Rudd said.
''This global economic recession is the equivalent of an economic cyclone, spreading from country to country, continent to continent, leaving wreckage in its wake.''
The Government's $42 billion package which contains one-off payments for millions of people, tax breaks for business and funds for schools and road infrastructure was designed to stave-off recession and ''support'' up to 90,000 jobs.
Without Coalition backing, the Government needed all seven cross-benchers on board to pass the legislation in the Senate. Five Green senators voted for the Bills after the Government agreed to cut the one-off payments by $50 to $900 and divert the $435 million saved to ''job creation and nation building'' projects.
Greens leader Bob Brown said the deal would create thousands of green jobs and deliver more help to the unemployed and low-income earners. Senator Brown had also secured a commitment from the Government to increase the age pension in the 2009-10 budget.
Senator Fielding reluctantly supported the laws.
''If you're on a ship going down and you're offered to save some lives, you would save some even if you couldn't save them all,'' Senator Fielding said.
''In other words, I may not have succeeded in saving 300,000 Australian jobs but I've certainly saved as many as I can.''
Senator Fielding had demanded $4 billion for a Get Communities Working scheme to create up to 24,000 jobs, but secured $200million for a pilot project.
Senator Xenophon wanted the Government to bring forward about $5 billion in funding for the ailing Murray Darling Basin.
He called for $2 billion extra to help regional communities adjust to farming reductions. The SA senator voted against the Bills after the Government offered a ''minuscule'' $400million to fast-track water buybacks.
Senator Xenophon said, ''This is a case of doing the right thing in the national interest.'' ACTU president Sharan Burrow said the Coalition and Senator Xenophon had jeopardised jobs as a result of their decision to block the Bills.
Australian Chamber of Commerce and Industry chief executive Peter Anderson said the outcome was a blow to business confidence.
Senator Xenophon said his ''door was open'' to negotiate with the Government, which introduced the amended laws into the House of Representatives shortly after 9pm. The Senate is expected to vote on the plan today.