Government Suffers Historic Defeat On Refugee Bill

The Coalition government has suffered a historic loss on its own legislation, throwing Scott Morrison's administration into chaos on the first day of the new sitting year.

The bill, to expedite medical evacuations of refugees from Manus and Nauru, passed 75-74 thanks to Labor-Greens-crossbench cooperation. The vote passed just hours after the government claimed such a move would be "unconstitutional".

It is thought to be the first time a government has lost such a vote since at least 1941. Claps and cheers broke out in the public gallery as the result was announced.

The bill now goes back to the Senate, for another vote on amendments raised in the House, where it is expected to pass.

Worse still for Morrison, a constitutional expert claimed the government's raising of the stakes could mean that it might affect the Coalition's hold on government.

Votes will come and they will go, they do not trouble me," PM Morrison claimed on Tuesday night, denying the loss was a fatal blow to his government.

"This was not what that vote was about this evening. If the Labor Party want to move such a motion, they should feel free to do so and it will fail... the Independents have made that very clear. So it cannot be contorted into that type of an outcome."

The government earlier claimed the Senate bill was unconstitutional, as it set up a panel of doctors who must be paid -- and the Senate cannot bring on a 'money bill'.

Attorney-General Christian Porter leaves after Question Time on Tuesday. (AAP Image/Mick Tsikas)

However, a quick Labor amendment to the proposed law set out that the panel of experts would not receive remuneration at all -- a strategy the opposition hoped would skirt any potential constitutional issue.

READ MORE: 'I Wish I Died In The Boat': Refugees Forgotten In Debate Over Medical Transfer Bill

Despite the government tabling the advice in the House of Representatives at the end of Question Time, just shortly before the debate on the legislation was due to begin, cooperation between Labor, the Greens and crossbench MPs ensured the bill would pass.

The cross-party coalition consigned the government to a defeat not seen in decades.

Constitutional law expert Professor Anne Twomey, of the University of Sydney, told Sky News that the legal advice was "fair and accurate", but the parliament could still consider the legislation, and that the High Court would not be in a position to strike down the law on constitutional grounds.

She also claimed that, if the government maintained this was a money bill, that by virtue of losing a vote on the legislation, it may be exposed to claims it has lost control of parliament.

"If the government is now asserting that this is a money bill, then, if the bill actually gets passed, against the wishes of the government, that would be an indication that the government has lost control over the finances of the country," she said.

"That's critical in terms of confidence and loss of government."

The result of the vote was welcomed by refugees and advocates.

Iranian refugee and journalist Behrouz Boochani said it was a "historical" moment.

“Today we saw politics at its best with MPs across the floor working together to ensure a humane solution," said Hugh de Kretser, Executive Director with the Human Rights Law Centre.

Kon Karapanagiotidis, CEO of the Asylum Seeker Resource Centre, called Monday "a landmark day."

"It is a victory for the national conscious of our nation and the triumph of compassion over the politics of fear and cruelty. Finally the rights of people that we promised to protect and care for, while seeking sanctuary have been realised today," he said.