The Federal Government's $42 billion economic stimulus package has been sunk in the Senate with independent Nick Xenophon joining the Coalition and voting against it.

The five Greens senators and Family First's Steve Fielding voted for it but the ballot was tied 35-all in the Senate, meaning the legislation was defeated.



It means low and middle income workers and families will not get the $12 billion in one-off cash bonus payments promised last week by the government and more than $28 billion worth of spending on school repairs and upgrades, building new homes and providing free ceiling insulation will not go ahead unless the government can find one more vote.

The government immediately laid the blame with Malcolm Turnbull and the Opposition for voting against the package.

South Australian independent Senator Nick Xenophon demanded $5 billion be brought forward from future years to buy back water and improve irrrigation infrastructure along the ailing Murray-Darling Basin.