Government's childcare rebate closer as senate passes smaller package of savings to fund reforms.

By political reporter Alexandra Beech.

The Senate has passed a range of savings the Federal Government says are needed to pay for its childcare package.

The Upper House sat until just after midnight debating the legislation on Wednesday evening.

The Government had initially wrapped the childcare changes into its so-called omnibus savings bill, which included $4 billion of savings and cuts to family tax benefits and paid parental leave.

The crossbench made it clear it would not support the changes unless they were decoupled from cuts to family welfare.

The Government compromised, putting forward a smaller package of savings.

Labor said it still opposed the inclusion of a two-year freeze on the indexation of family tax benefits, which Labor Senator Doug Cameron said would put Australia on the path to American-style welfare.

“The needy in this country pushed to the side for an American system,” he said.

Senator Cameron warned crossbenchers against backing the legislation.

“If you agree to this tonight, it’s only the start,” he said.

“This is only the first attack, the attacks will continue from this government.”

But Finance Minister Mathias Cormann dismissed that, saying the savings were “reasonable and fair”.

“No family will actually receive less as a result of the changes before us today,” Senator Cormann told the chamber.

This post originally appeared on ABC News.