The government has shelved its controversial plan to drug test thousands of people receiving Newstart and Youth Allowance, after it failed to secure the support of the Senate cross bench to pass the controversial measures.
Due to begin in January next year, 5,000 new welfare recipients were expected to be tested for ice, ecstasy and marijuana at three sites around the country. If the trial was successful the program was likely to be expanded.
Under the proposal, people who tested positive to illegal drugs would have had 80% of their payments put onto a cashless debit card that could only be spent on rent, child care and food. A second positive test would result in the recipient being charged for the cost of the test and referred for treatment.
The trial, which Malcolm Turnbull described as being "based on love", has been almost universally condemned by drug and alcohol experts, academics and welfare groups, and described as "misguided" by the prime minister's favourite charity, the Wayside Chapel in Sydney's King Cross.
Labor, the Greens and the Nick Xenophon Team refused to support the measures, leaving the government a few votes shy of a majority. Senator David Leyonhjelm has a list of demands before handing over his vote, including adding alcohol to the substances being tested for.
Social services minister Christian Porter's office told BuzzFeed News the government was not abandoning drug testing, and that he will reintroduce the policy when he believes he has the numbers.
Porter's office said that the drug testing component of the legislation will be carved out from the welfare reforms omnibus in order to get it through the Senate by the end of this week. Announced at the May budget the reforms include a demerit points system for welfare recipients who fail to turn up to meetings and job interviews.
Labor is calling on the government to dump the policy and invest in drug rehabilitation services that are proven to work.
"Nobody doubts that we face significant problems with drug addiction in the community, but there is no evidence that this trial will work," shadow minister for social services Jenny Macklin said in a press release on Tuesday.
"The time has come for Mr Porter to listen to the experts and dump this expensive and flawed trial once and for all," she said.
Porter said the government will not give up on creating new policies to break the "cycles of welfare dependence" and move people from welfare into the workforce.
"Where Labor increased the number working age Australians dependent on welfare by 250,000 our government has reduced that number by 140,000," Porter told the National Press Club two weeks ago.
"What I will be saying to cross bench senators is that everything we are doing to move people from welfare to work is working and the welfare reform bill before the Senate is the next critical step in reforming the welfare system to get even more people to break the cycle of welfare dependency.
"I have already publicly said that I would not hold up the entire bill and the significant reforms it provides to consolidate working age payments and a simpler compliance system, if the drug testing measure appears unable to win adequate support at this time."
The Senate is due to debate welfare reforms on Wednesday.