The political ping pong in the Senate over controversial changes to financial advice laws is set to continue.
The upper house voted late on Wednesday to reverse changes the Abbott government made to Labor's Future of Financial Advice (FOFA) laws.
But Finance Minister Mathias Cormann is playing down the defeat and vowing to push ahead with draft laws before parliament.
The government will continue negotiations with the crossbench to get the bill passed.
"We will continue to make our case," Senator Cormann told ABC radio on Thursday.
The Senate result came after crossbenchers Ricky Muir and Jacqui Lambie declared they would side with Labor, despite previously voting twice to keep the FOFA changes.
After a series of financial collapses the previous Labor government aimed to tighten rules surrounding financial advisers, but in July the government used regulation to modify the laws.
Senator Cormann warned the Senate's decision would push up the cost of advice and reduce competition.
The government did not want unnecessary red tape costs imposed on people saving for their retirement, he said.
Labor's Sam Dastyari said Senators Lambie and Muir had been brave to change their minds.
He denied the pair had backflipped to get back at Clive Palmer, and said they had joined the so-called "coalition of common sense" for all the right reasons.
"They looked at the evidence, they spoke to the victims, and they came to the conclusion that frankly they voted the wrong way in the past. These were bad laws and they were prepared to change their vote," he told ABC radio.
Senator Dastyari predicted the two crossbenchers would continue to vote against the Palmer United Party in the future.
"I think you're going to find them increasingly going in their own way," he said.
Independent senator Nick Xenophon has extended an olive branch to the government, saying there is scope for sensible compromises.
"Hopefully Senator Cormann has had a Bex and a lie down ... and in the cool light of day he'll realise ultimately we did the coalition a very big favour," he told ABC radio.
The threat of another financial collapse with hundreds more victims was real and the coalition would have been blamed for people losing their life savings.
"We should not compromise on giving financial advice in the best interests of clients," he said.
Nationals senator John Williams said it was "rot" to suggest the government had watered down consumer protections.
"We're removing costs," Senator Williams said.
"Now one-in-five Australians seek financial advice - that is unacceptable. We need to have more people seek professional advice."
Senator Lambie and Senator Muir had broken their word on the government's financial advice changes, veteran Liberal Ian Macdonald said.
"It's a bit of a shame for democracy and for the parliament that people just can't be trusted," he said.
Shadow Treasurer Chris Bowen said the defeat of the Abbott government's proposed changes to the laws was a victory for millions of Australians.
The battle between "an arrogant federal government and millions of Australian consumers" must continue, he said.
Senator Cormann's insistence on passing the changes to legislation through the Senate would create chaos for the financial sector, he said.
"This will create further uncertainty for the (financial) sector," Mr Bowen said.
