The federal coalition’s “reckless” decision to vote down Ruddbank, which was intended to assist the commercial property sector, will put thousands of jobs at risk, Labor says.

But the government won’t say if it will try again to get its fund through the Senate.

The Rudd government wanted to commit $2 billion in taxpayer funds to a partnership - dubbed the Ruddbank - with Australia’s four big banks, to assist developers to access loan funds in the event foreign banks withdraw finance due to the global recession.

But the coalition and the Australian Greens used their numbers in the Senate to block the move on Tuesday night.

Treasurer Wayne Swan said the government is still considering whether to reintroduce the legislation.

“This was a very important contingency measure,” he told reporters, adding tens of thousands of jobs were now at risk.

Small Business Minister Craig Emerson said up to 50,000 plumbers, electricians and carpenters could lose their jobs in the commercial property sector.

“The advice of Treasury is that without action, a combination of weak demand and tight credit conditions could result in up to 50,000 people losing their jobs in this sector,” Dr Emerson told parliament.

Prime Minister Kevin Rudd said Opposition Leader Malcolm Turnbull was the “single living road block” to many businesses in Australia having access to support jobs in the construction industry.

“This stands as one of the more reckless acts in which the Liberal Party has engaged in recent times,” Mr Rudd said.

The Greens voted down Ruddbank because the government wouldn’t agree to cap the salaries of bank and property chiefs benefiting from the fund.

Finance Minister Lindsay Tanner took aim at the minor party’s stance, saying its decision to vote with the coalition was “really outrageous”.

“The Greens are simply engaged in empty populist posturing,” he told ABC Radio.

Mr Tanner described as “ludicrous” a cap on salaries to “certain kinds of people in certain companies”, saying the government was already in the process of tackling executive pay by way of a Productivity Commission inquiry.

But Greens leader Bob Brown wasn’t backing down.

Developers were expecting to receive millions of dollars in public-guaranteed loans “and should be prepared to have their CEOs be reasonable about salaries”, he told reporters.

Opposition finance spokeswoman Helen Coonan said the legislation’s defeat a second time could be used as a double-dissolution election trigger by the prime minister.

“We know that he’s desperately trying to find some basis to short circuit the electoral process and to go for an early election,” Senator Coonan told ABC Radio.

“We know that he doesn’t want to face another budget, where the Australian people will really understand the reckless spending and the mess that Australia is in.”

The Property Council of Australia said it was disappointed by the Senate vote.

Chief executive Peter Verwer told ABC Radio it put Australia “behind the game” as countries, such as the United States and Japan, created their own contingency plans.

“There are several European countries that have leaned on their banks and told them to repatriate their lending,” Mr Verwer said.

But he was unable to nominate any specific Australian project which had been affected.

AAP