Transgender rights reforms allowing Tasmanian parents to choose whether to include their baby’s gender on a birth certificate has moved a step closer to becoming law after a Labor and Greens bill passed the state’s lower house.

The changes were passed on Tuesday night by the casting vote of Liberal Speaker Sue Hickey, who voted against her party.

The bill, which also allows people over 16 to change the gender on their birth certificate by filling out a statutory declaration, was welcomed by the activist group Transforming Tasmania.

“I applaud the Tasmanian lower house for providing greater equity, dignity and hope for transgender, gender diverse and intersex Tasmanians,” spokesperson Roen Meijers said.

Ella Haddad, Labor’s justice spokeswoman in Tasmania, said it was a great outcome on the back of the marriage equality vote that won’t diminish the rights of others.

Quick Guide Tasmania’s transgender rights reforms Show What's on the cards? The proposed amendments to the Tasmanian Births, Deaths, and Marriages Registration Act 1999 will mean that parents will have to opt-in to have their child’s gender registered on their birth certificate. They will be able to do this by filling out a form provided to the registry of births, deaths and marriages. The legislation sets out that such information must not be included without the child’s consent – or “consistent with their will and preferences” – but there’s a loophole for very young children or children who are “unable to understand the meaning and implications of the gender to be included”. People over the age of 16 will be able to apply to remove, change or include gender on their birth certificate, and change their name on that certificate, and the updated certificate will include no reference to either name or gender having been listed as something different. De-identified data on gender and birth rates will still be recorded. It is the first such reform in Australia. The joint proposal by Labor and the Greens is intended to overturn strict legal provisions governing the legal recognition of transgender persons in Tasmania. Under current law, a person can only be recognised as their identified gender if they have undergone full gender reassignment surgery. Photograph: www.alamy.com

However, Scott Morrison called the changes “ridiculous” and called on Labor leader Bill Shorten to “step up and commit to put a motion to ALP federal conference to outlaw it”.

Shorten told reporters in Sydney he had no plans to change protocols around birth certificates.

“I’ve got no plans to change the way that birth certificates are filled out in this country.

“I saw Mr Morrison out talking about gender issues again, if that’s what’s most important to him that’s his prerogative,” he said.

Elise Archer, the state’s Liberal attorney general, believes the amendments are deeply flawed. “This amended bill contains legally untested, unconsulted and highly problematic changes that we could not support,” she said in a statement.

An amendment to Tasmania’s anti-discrimination laws, designed to ensure the correct use of transgender people’s names and honorifics, was also passed.

The changes were attached to a bill introduced by the government that would stop people who transition genders from being forced to divorce, bringing state laws in line with federal legislation.

The government had wanted the amendments referred to the Tasmania Law Reform Institute.

“These changes will make people, who we should all care about, feel happier, safer and more included,” the Greens leader, Cassy O’Connor, told parliament.

The bill must still pass Tasmania’s upper house of mostly independents before becoming law.