Independent senator Lidia Thorpe has slammed federal Labor, accusing the party of hypocrisy after new income management legislation passed parliament.

The Income Management Reform Bill received bipartisan support to pass the senate on Thursday, however Ms Thorpe condemned the bill as a return of the previous controversial cashless debit card scheme under a different name.

During debate surrounding the bill, Ms Thorpe spoke passionately in the Senate, recalling statements made by numerous Labor MPs relating to the abolishment of previous legislation, stating the cashless debit card scheme "is not gone".

In subsequent social media posts, Ms Thorpe accused Labor of "paternalistic racism" whilst suggesting "assimilation continues".

"The ration days continue. Assimilation continues. And we are meant to trust a government like this with listening to an advisory board? They don't even listen to themselves," Ms Thope's Twitter post read.

The cashless debit card scheme, which was torn up by federal Labor received widespread criticism for unfairly targeting and negatively impacting Indigenous communities.

The new scheme uses the SmartCard system, which allows access to tap-and-go transactions, online shopping and BPAY, with the estimated 20,000 Australian on compulsory income management schemes able to use the system.

The Greens also opposed the bill, saying the new scheme will disproportionately affect Indigenous people.

Greens Senator and spokesperson for Social Services Janet Rice condemned the new policy, accusing the government of hypocrisy after introducing the bill in the same week the Constitutional Alteration Bill passed both houses of parliament, legislation necessary to hold the Indigenous Voice to Parliament referendum.

More broken promises, more paternalistic racism from Labor pic.twitter.com/DAdw2XBxCh

— Senator Lidia Thorpe (@SenatorThorpe) June 22, 2023

"Labor promised voters they would abolish the Cashless Debit Card. Now they're rolling it out again, just with new branding," Ms Rice said.

"Labor have now gone further than the Liberals did in expanding the racist and entirely ineffective compulsory income management system. We don't need another Conservative Party in this country."

Ms Rice said Labor's actions were at odds with a number of Indigenous organisations.

"In the same week as securing the Voice referendum, Labor teamed up with the Coalition and PHON to pass a racist bill that overwhelmingly targets First Nations people, against the wishes of key First Nations organisations, including the Central Land Council and the Aboriginal Peak Organisations Northern Territory, that gave evidence to the bill's inquiry," she said.

"The only differences between Labor's SmartCard and the Cashless Debit Card are its name and colour."

Although the Coalition supported the bill, Liberal senator Anne Ruston called out the government's method in phasing out the previous cashless debit card, arguing it exacerbated social issues in communities where the scheme was in place.

"(The government has) tarnished themselves so badly they have disregarded the needs of communities," Ms Ruston told parliament.

"Leaders from cashless debit card sites, community leaders and Indigenous leaders, are saying 'please reinstate the cashless debit card and help us deal with the dysfunction and violence and alcoholism that we are now seeing again'.

"Since the card has been abolished in these communities, we've seen crime statistics double."