Crossbench senator Jacqui Lambie has demanded more support for social housing ahead of Thursday's Senate vote on the Government's income tax cuts plan.
The Tasmanian senator could hold the deciding vote on the $158 billion package, which passed the Lower House on Tuesday night.
Senator Lambie said while she was yet to arrive at a final position, people in her state were "doing it tough" and she wanted the Federal Government to waive Tasmania's $157 million social housing debt.
"Tasmania is paying 50 cents in every dollar of our state housing budget back to the Federal Government in interest and debt repayments," she said.
"That means we are building half as many homes, helping half as many people.
"Tasmanian families are sleeping in cars, parks and tents — all in the dead of winter — 3,000 Tasmanians are on the housing waiting list.
"There is no way in good conscience I can vote for substantial tax cuts without making sure that the people who so desperately need a roof over their heads aren't left to go without."
In a statement, Finance Minister Mathias Cormann said the Government was "always happy to engage" with senators on issues of concern to them.
"We will be putting our plan for lower income taxes to the Senate tomorrow," he said.
"We call on Labor and all other non-government senators to act in the national interest by supporting our income tax reforms in full.
"Our income tax plan is economically necessary and fiscally responsible and it was endorsed by the Australian people at an election."
Speaking in Tasmania last month, Assistant Treasurer Michael Sukkar said waiving Tasmania's debt could have broader implications.
"If the Commonwealth Government was to extinguish the debt for one state or territory, it would be very, very logical that other states and territories would ask for the same treatment," he said.
Mr Sukkar said the total amount owed by states and territories was more than $2 billion.
Crossbench support needed to pass tax cuts package
The Coalition holds 35 of the Senate's 76 seats, meaning it needs the support of at least four of the six crossbenchers to pass legislation opposed by Labor and the Greens.
Senator Cory Bernardi is expected to support the package in full, while Centre Alliance, which has two votes, has indicated it is also in favour.
But Pauline Hanson's One Nation — which also control two votes — is against the full package, meaning it could come down to Senator Lambie's decision.
The Labor Party unsuccessfully tried to move amendments to the bill in the House of Representatives to bring stage two of the package forward and separate stage three.
It later passed without opposition from Labor, which believes it has a better chance of passing the amendments in the Upper House.
The bill is not expected to come before the Senate until Thursday, after Wednesday's sitting was set aside for condolence motions for former prime minister Bob Hawke.
