A cross-party parliamentary committee inquiry, including government members, found the compulsory ParentsNext program impinges on the human rights of parents and children.

"Only an incompetent, arrogant government would ignore the views of their own backbench," Labor's Patrick Dodson told parliament on Wednesday.

"It is causing harm to vulnerable parents and their children."

Senator Dodson said parents were unable to meet the basic needs of their children under the program.

One third of program participants have had their parenting payments suspended, for an average of five days without an income, and First Nations parents make up one third of those punished.

"This is not the kind of country we are. We can do better than this. In fact, we must do better," Senator Dodson said.

"It doesn't have to be this way."

The vote to get the program made voluntary was tied at 16-all, which meant it failed.

Australian Council of Social Service head Cassandra Goldie has called on the government to make the program voluntary and remove the automatic payment suspensions that she says have been causing harm.

The government argues the scheme is assisting parents to get an education and jobs.

Australian Associated Press