Malcolm Turnbull's political agenda for the final week of Parliament could be on hold after a crucial crossbench grouping announced it would not vote for any government bills until a water dispute is resolved.
The government has high hopes it will be able to pass laws to re-establish the Australian Building and Construction Commission and reach a compromise deal on the backpacker tax rate to round out the political year.
But crossbench kingmaker Nick Xenophon on Friday announced his three senators would not back those bills - nor deal with the government on any legislation - until a dispute of Murray River water allocations is solved.
The dispute centres on whether an extra 450 gigalitres of water set aside for environmental flows in the river in South Australia under a 2012 deal will be allocated.
That allocation is on top of the 2750 gigalitres set aside for the length of the river across the east coast states. Agriculture Minister Barnaby Joyce and NSW, Victoria and Queensland have flagged withholding the extra allocation because of the impact on communities upstream.
Mr Joyce and Mr Turnbull have been under sustained pressure over the deal in Parliament. They argue they are committed to the 2012 Basin Plan deal but highlight the plan makes the allocation of an extra 450 gigalitres contingent on there being no negative impact on communities upstream on the east coast.
However, on Friday Senator Xenophon claimed the 450 gigalitres was "guaranteed" by the plan and the government had to follow through if it wanted to deal on any other legislation.
"I've talked to the Prime Minister and the Premier [of South Australia, Jay Weatherill], and we are still talking. I can't leave this unfinished before Parliament rises," he said.
"We need to sort out this water mess before we sort any other pieces of legislation the government is interested in."
At a minimum, the federal government may have to commit to some of that 450 gigalitre allocation if it is to have any luck passing the ABCC and backpacker tax bills in the final week.
It will also have to rely on the Pauline Hanson One Nation quartet - who are signalling a compromise on the backpacker tax rate at 15 per cent could be in the offing - as well as other crossbench senators to pass these bills.
Senator Xenophon's NXT colleague Rebekha Sharkie said voters in her electorate had been robo-called by unions this week over protecting water flows to South Australia, where water is one of the most controversial political issues.
"I'm pretty confident that a deal will be struck, I'm pretty confident the federal government knows we are serious about this, we do not need an unravelling of the historic agreement we have," she said.
Earlier in the week, South Australian Liberal MP Tony Pasin confronted Mr Joyce in the party room over the issue.
South Australian Liberals fear the long-serving Mr Weatherill will use the water dispute as a political issue to damage their prospects in the forthcoming state election.
