Key crossbench senator Rex Patrick will vote against continuing the cashless welfare card, putting the government's legislation in danger of being defeated.
Senator Patrick is believed to have the crucial vote in the upper house, which is debating the bill on Wednesday evening.
"In the end, weighing up all the evidence, the difficulty for me is the government has not made out its case," he told parliament.
Senator Patrick criticised the coalition for pointing to an unreleased report about its effectiveness in stopping welfare recipients from drinking, gambling or using drugs.
"We do not have empirical data, any definitive data set that would guide as to whether or not it actually does achieve those particular objectives," he said.
If the bill doesn't pass before parliament rises for 2020, the controversial trials will end abruptly on 31 December.
The legislation also moves more than 20,000 people in the Northern Territory onto the cards from another income management scheme.
Trials are occurring in Ceduna, the East Kimberley and Goldfields in Western Australia, and Bundaberg and Hervey Bay in Queensland.
Senator Patrick visited Ceduna as he made his deliberations on the card, which quarantines up to 80 per cent of welfare so money can't be spent on alcohol or gambling.
"Probably the most important people I spoke to were those that were required to use the card," he said.
Labor and Greens senators have condemned the bill as a “racist” and “discriminatory” policy that will disproportionately impact Indigenous Australians.
The federal government argues the card has helped communities by preventing welfare recipients from spending money on alcohol and drugs.
Labor Senator Malarndirri McCarthy delivered an emotive speech over the cashless debit card. Source: AAP
But Northern Territory Labor senator Malarndirri McCarthy said the government had failed to show evidence justifying its decision.
“This legislation is wrong. It is unjust - it is racist and so un-Australian,” she told the Senate.
“Listen to the Australians out there who are crying out for your empathy and to recognise the hardship that they are experiencing.
“All this legislation does is push people further and further underground.”
The cards freeze the majority of JobSeeker welfare support payments so cash can't be withdrawn, and money can only be spent on items deemed essential.
Multiple inquiries into the scheme have heard issues with the system's ability to process rent and other debit payments.
Greens Senator Lidia Thorpe compared the restrictions imposed by the card to “21st-century rations” saying the measure hindered the "self-determination" of Indigenous Australians.
“That’s what this is - let’s tell the truth - it’s putting black people back on rations,” she told the Senate.
“Management of income is racist and colonial nonsense all over again and it is demeaning to us.”
The draft legislation narrowly made its way through the lower house on Monday with 62 votes to 61.
This came after Liberal MP Bridget Archer, who has publicly rebuked the policy, chose not to vote.
Greens Senator Rachel Siewert said the lack of evidence supporting bill meant it was an “outrageous waste of funding.”
“This card is a racist, discriminatory, paternalistic approach that costs this country a fortune,” she said.
“[It] takes away people’s dignity causes anxiety and stress - it is not a good measure.”
Additional reporting by AAP.
