Winter-break headache as Labor hones re-election pitch

Instead, it finished the sitting fortnight with the defection of Senator Fatima Payman to the crossbench amid claims she had been exiled by colleagues.

Senator Payman quit Labor on Thursday, saying the party had been too slow to recognise Palestinian statehood and she had exhausted all internal options.

There had been anger from Labor colleagues after Senator Payman acted against party solidarity on issues surrounding the conflict in the Middle East.

She said she had resigned from the party with "a heavy heart but a clear conscience".

Senator Payman will sit in the upper house as an independent, with the government needing the Greens and three crossbenchers to pass its legislation.

University of Sydney senior lecturer Stewart Jackson said while there was one less member on the Labor benches, it may not be as challenging for laws to be passed.

"The decision of Payman to resign makes Senate management more difficult for the ALP, but they can generally count on Payman supporting the ALP over the coalition more broadly," he told AAP.

"It has ensured that the issue of the Israel-Palestine conflict remains front-page news for another week."

The government had aimed to spend the winter break spruiking its cost-of-living support measures which had kicked in from Monday and included $300 in energy bill relief and more generous tax cuts.

As Prime Minister Anthony Albanese aims to put distance between the government and the controversy surrounding Senator Payman, he will use a speech to local government leaders to announce dozens of housing projects.

Eighty projects across the country will share in $50 million in funding as part of the government's housing support program.

A further $450 million had also been made available for local councils from Friday to build infrastructure like roads and sewerage to allow for new homes to be built.

"New housing in our cities and suburbs is vital to our growth and prosperity as a nation. It's fundamental to security and opportunity for our people," Mr Albanese will say in the speech.

"This is a key priority for us. It's an area where there has been a lack of investment by the federal government for too long and we are fixing it."

The coalition is expected to use the winter break to refine attempts to sell its flagship nuclear power plan, with Opposition Leader Peter Dutton having reportedly warned MPs to prepare for an election in coming months.

Mr Dutton, who has rejected suggestions of party disunity over his threat to break up price-gouging supermarkets, will address the annual Queensland LNP conference on Saturday alongside Nationals leader David Littleproud.

Australian Associated Press