14/02/2017 9:17 AM AEDT | Updated 14/02/2017 1:09 PM AEDT

Turnbull Ties Welfare Cuts To The Disabled, And Senators Are Mad

'Dumb policy and even dumber politics', Nick Xenophon said.

CANBERRA -- The government's headline-grabbing childcare bill, announced just a week ago, seems to be almost dead after its trump card play to win crossbench support -- promising to direct savings from welfare cuts to the National Disability Insurance Scheme -- spectacularly blew up in its face.

The bill, which would give cheaper childcare to thousands of families and extend government paid parental leave to 20 weeks, also had a few stings in the tail with hidden cuts to welfare for young people. As we revealed last week, the bill would have forced young people to wait four weeks before being able to access Centrelink payments, as well as moving 22-24 year olds from the Newstart payment to the Youth Allowance, which pays $45 less per week.

Under the current Senate, the government would need almost all of the crossbench to ensure the legislation would pass. Last week, the three senators from the Nick Xenophon Team said they were leaning toward voting against the bill, so on Monday, treasurer Scott Morrison announced the savings from welfare cuts would be redirected toward the NDIS. They thought this compromise would be a winner for crossbench support. It seems they thought wrong, with Xenophon not being swayed by the NDIS commitment.

"Getting people on lower incomes to pay for childcare reforms is pretty unfair. There are better ways to do this. We're not against all the omnibus bill but it's back to the drawing board," Xenophon said on Today.

In a press release, Xenophon called the NDIS promise "robbing Peter to pay Paul".

"As a negotiating tactic, this is as subtle as a sledgehammer. Pitting battling Australians against Australians needing disability support services is dumb policy and even dumber politics," Xenophon's statement read.

Xenophon instead suggested cuts to defence spending to pay for the childcare bill. Fellow South Australian, Defence Industry minister Christopher Pyne, unleashed on Xenophon on Twitter.

But Xenophon fired right back, disputing Pyne's claims.