The citizenship legislation, which includes a four-year waiting period under permanent residency for applicants and a tougher English language test, is before the Senate but is poised for defeat with opposition from the Nick Xenophon Team.
But those who have applied for citizenship after the changes were announced on April 20 are facing those same rules, despite the legislation not having cleared parliament.
Labor's citizenship spokesman Tony Burke says it is an unprecedented and unusual arrangement.
“What it has meant is a whole lot of people who had the lawful entitlement under Australian statute right now to apply for citizenship are not having their claims processed,” he told the Federation of Ethnic Communities' Councils of Australia on Monday.
Mr Burke would not pre-empt the outcome of the bill’s future but called on the government to reverse course.
"But let me say this - if the Senate does reject the government's legislation then the department must start processing every application and processing it immediately under the Australian law," he said.
Mr Burke said the arrangement - around applications being treated under unlegislated policies – was unexpected in Australia.
"The countries of the world where you expect that sort of behaviour are not known as democracies": Tony Burke. Source: AAP
"The countries of the world where you expect that sort of behaviour are not known as democracies," he said.
"In Australia we have every right to expect that citizenship applications will be assessed according to the law of the day and for it to have not passed the Parliament but be implemented anyway is something that has to end the day the Senate rejects this bill."
Mr Burke also described the changes as "the most direct attack on modern multicultural Australia since the abolition of the white Australia policy".
The Federation of Ethnic Communities' Councils told SBS World News the conference in Darwin was being held at a crucial time.
"It is important because multiculturalism has come under attack, not only in Australia but also worldwide," FECCA chairperson Joe Caputo said.
"What makes a good Australian is a commitment to this country, it’s not just passing an English test... but it’s what’s inside the heart."
The Department of Immigration said citizenship applications that were already in the process of being assessed before April 20 would continue to be processed.
"The department does not anticipate any impact on the processing of applications lodged after 20 April," it said in a statement to SBS World News.
"At 18 September 2017, 90 per cent of applications for Australian citizenship by conferral were processed within 14 months of the date of lodgement."
The department said it would continue with delivery of the citizenship program while new arrangements were being settled.
"Applicants will receive communication on the implementation of these measures and any additional information and documentation that may be required to support their application," the department said.
