Local councils are set to get $350 million a year for roads after a deal was struck between the federal government and Senate crossbenchers.
However, the government and senators are at odds over the details of the deal.
The Senate on Wednesday morning was debating amendments to the Land Transport Infrastructure Amendment Bill.
The bill will extend the timeframe beyond June 30 for the Roads to Recovery program as well as make a raft of other changes to transport laws.
Labor has been holding up the bill, insisting that the government legislates cost-benefit analyses for all projects valued at more than $100 million and that greater public scrutiny is put in place.
Palmer United Party Senator Jacquie Lambie says her two PUP colleagues and the Australian Motoring Enthusiast Party’s Ricky Muir will support the bill after talks with the government.
Senator Lambie says she has secured an extra $200 million for Tasmanian roads.
But a government spokesman told AAP on Wednesday that there had been no horse-trading and no sweeteners had been offered to pass the bill.
A Labor spokesman said the opposition was still talking to the crossbenchers about supporting their amendments.