Premier Will Hodgman has threatened to repeal landmark legislation making gender optional on birth certificates after Speaker Sue Hickey embarrassed his government voting with Labor and the Greens to see it passed.
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Ms Hickey defended her decision to vote with Labor and the Greens but political analyst Professor Richard Herr said the debate on the legislation could have been delayed.
"This is not a win for any particular political party but rather it grants dignity to the transgender community," she said.
Despite Attorney-General Elise Archer being absent from parliament because of the death of her mother, Ms Hickey used her casting vote to bring on debate of the bill which was overhauled by the Legislative Council.
"It had to be debated, it has been delayed since before Christmas," Ms Hickey said.
"And the Premier hasn't got the numbers to repeal it, that's just bluster."
Professor Herr also questioned Ms Hickey's involvement in a "policy role" in Parliament.
"They could have delayed it out of respect because it wasn't going to change the numbers. It is accepted that the Speaker votes with the government and her active role from the chair is unusual and it weakens the government."
But for Mr Hodgman the fight against the legislation - the first of its kind in Australia - is not over.
He accused Labor and the Greens of taking "extraordinary and unprecedented steps to overturn the usual Parliamentary process.
"For a heavily-amended Bill to be received back from the Legislative Council and to be called on for debate immediately, particularly in the absence of the Attorney-General from the House, is highly unusual and poor process for making laws that affect all Tasmanians," Mr Hodgman said.
"This legislation has been rushed at every stage by Labor and the Greens, who have ignored the views of Tasmanians and eminent legal stakeholders who have raised concerns and pointed out that there has been no opportunity to undertake a full review of what is being proposed and how it impacts on other statutes.
"Because of the refusal by Labor and the Greens to consider the legal consequences of their amendments, it is highly likely the Parliament will need to fix up problems with the legislation and repeal the Labor-Green amendments at a later date."
Labor's legal spokeswoman Ella Haddad said the legislation had always been about "fairness and choice".
All Tasmanians have the right to be treated equally," she said.
"The outdated requirement that people undergo invasive surgery to be recognised for who they are is gone.
"There is now a fair, simple process for people to have identity documents that reflect who they are."
Greens leader Cassy O'Connor, who has a transgender son, was delighted the legislation had finally passed.
"While the campaign behind these reforms has been ongoing for almost 15 years, the legislation we passed today has undergone extensive consultation over the past four months," she said.
Spokesperson for Tasmanian Families for Transgender Kids, Candace Harrington, encouraged other states to follow Tasmania's lead.
"Parents of transgender and gender diverse kids are just so happy that our kids will no longer face legal discrimination and will be able to live their lives true to themselves," she said.
"We are over the moon about these landmark reforms and are deeply grateful to all those politicians who have listened to our stories and supported us along the way.
My message to other parents around Australia is to tell your personal stories as we have done. We overcame prejudice and politics and you can, too.
- Candace Harrington
Transforming Tasmania spokesperson, Martine Delaney, said it was an historic day for transgender and gender diverse people, "not only in Tasmania but around the world".
"This legislation ranks among the most inclusive and equitable in the world," she said.
Another prominent campaigner Roen Meijers, said: Young transgender and gender diverse Tasmanians will grow up in a different world from the one we have known because the law will respect and protect who they are."
The Australian Christian Lobby says it is a bad law and regrets the Tasmanian parliament "has been overcome by ideological debate, ensuring the transgender activists obtained everything on their wish list"
ACL acting director Dan Flynn said it was a sad fact that the government was outnumbered.
"ACL welcomes Premier Hodgman's statement today that his government would be open to repealing the Bill, should it have the opportunity," he said.
"What was the 'marriage amendments bill' now allows regular changes of gender to an infinite variety of genders; all to be recorded on near meaningless birth certificates.
"What is incredibly concerning it that no consideration has been given to the impact on women's refuges, schools, and clubs.
"Under the Bill, prisoners will be able to demand accommodation in prisons that accord with the gender they choose. That is not in the interests of the justice system or broader community."