CONTENTIOUS changes to the Racial Discrimination Act - which have bitterly divided the Federal Government for the past four years - have been voted down by the Senate
The Turnbull Government's attempts to remove of the offences "insult", "humiliate", and "offend" and replace them with "harass" in section 18C of the Act were on Thursday night defeated by Labor, Greens and key crossbench senators, 31-28.
But the Government was set to win key changes to the process of the handling of complaints under the Act - which have included several high-profile cases in the past five years.
The commission will be given greater powers to filter complaints which are deemed to be frivolous or without merit and those who are the subject of the complaint will get an early warning when a complaint is lodged.
MPs and senators were forced to stay in Canberra last night as the government attempted to pass key legislation ahead of a five-week break before the May Budget.
Finance Minister Mathias Cormann defended the government's decision to push for changes to race-hate speech laws ahead of the budget.
"We were very keen to give it our absolute best shot to persuade the crossbench to join us in strengthening anti-vilification laws, joining us to improve the procedures that currently apply, and to improve the protections for freedom of speech," Mr Cormann told ABC radio this morning.
"It's an issue that's been debated for some time. There was obviously a report from the parliamentary committee on human rights. It's an issue, among a whole series of other issues, that the parliament's had to deal with," he said.
"The debate is still to be finalised today."
COMPANY TAX CUTS REMAIN UNDECIDED
The Government's key economic platform - lowering company tax cuts to 25 per cent - was set to be debated late into the night.
However, the upper house adjourned just after midnight, following the marathon debate on changes to 18C
Debate is set to resume again at 9am.
Senator Nick Xenophon's bloc of three senators back a tax reduction for businesses with a $10 million turnover.
Fellow crossbencher Derryn Hinch was also backing a reduction up to $10 million but had changed his mind on Thursday night, supporting tax cuts for businesses with a turnover of up to $50 million.
Pauline Hanson's bloc of four senators also support a reduction up to $50 million while the government can expect support from crossbenchers David Leyonhjelm and Cory Bernardi.
Treasurer Scott Morrison was coy on the progress of negotiations insisting even a cut up to $10 million was a win.
There were 100,000 businesses with a turnover between $2 million and $10 million, which employ 2.2 million Australians, he said.
"At the very least, if that's what is achieved... then I would say that that is a very, very good result for those 2.2 million Australians and I wouldn't dismiss it in the way that some might," Morrison told ABC TV. "If the adage is that, in today's politics, it's 100 per cent of something or 100 per cent of nothing, then I don't think that's the practical way to approach politics."
Update your news preferences and get the latest news delivered to your inbox.