Labor will vote against rolling out cashless debit cards across two new trial sites, putting at risk the program's expansion, News.com.au reports.
The opposition will back extending trials at Ceduna in South Australia and the East Kimberley, but says communities in Bundaberg and the WA Goldfields have not been properly consulted about being included.
"Labor believes that there is insufficient credible evidence at this point to support the establishment of further trials of the cashless debit card," Labor's Linda Burney and Jenny Macklin said yesterday.
The opposition took aim at a "flawed and inconclusive" evaluation of the cards.
Independent analysis released earlier this year found a "considerable positive impact" in both communities, but experts have criticised the research.
"Given the significant costs of the trials ... we must be sure the cashless debit card can deliver its stated objectives," the Labor frontbenchers said.
Labor wants the existing trials to run until June 2019 so they can be evaluated over a longer period.
It is also demanding funding for additional "wrap around" services for participating communities be guaranteed in legislation.
The cards quarantine a large chunk of welfare payments from being spent on booze and gambling.
They have been in operation in Ceduna and the East Kimberley since April 2016, and the government was to introduce them to the two extra sites early next year.
Human Services Minister Alan Tudge accused Labor of turning its back on desperate communities plagued by drug, alcohol and gambling abuse.
Meanwhile, AAP reports the Turnbull government may also need to drop controversial plans to drug-test welfare recipients if it wants the Senate to approve a raft of welfare measures.
The omnibus bill includes plans to drug test 5000 Newstart and Youth Allowance recipients across three trial sites in NSW, Queensland and Western Australia from January.
As Social Services Minister Christian Porter tries to win over upper house crossbenchers, at least one of them says the government's assumption about drug users is wrong.
"You can have two joints and fail two drug tests and not have a drug problem," Liberal Democrat David Leyonhjelm told reporters in Canberra yesterday.
"It's also expensive and will cost taxpayers money so I was never going to support that."
Mr Porter has indicated he is willing to put off the trials so other changes are not delayed, but intends to pursue negotiations right up until the legislation lands in the Senate.
"What I will be saying to crossbench senators is that everything we are doing to move people from welfare to work is working," he told AAP.
Labor rejects welfare debit card expansion (News.com.au)
Crossbench urged to block drug test trials (Perth Now)