Tony Abbott may tweak budget but vows not to sell out the fundamentals

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Senior ministers signal a willingness to compromise, but PM maintains, ‘We’ve got to get this budget crisis back under control’

Tony Abbott
Abbott: ‘this country cannot go on borrowing a billion dollars every single month to pay the interest on Labor’s debt.’ Photograph: Nikki Short/AAPImage

Tony Abbott has said the government will not “sell out the fundamentals”, as senior ministers signal their willingness to compromise on budget measures.

The prime minister returned to the “budget crisis” theme on Monday, while ministers continued talks with crossbench senators over contentious measures, including the introduction of a Medicare co-payment, an overhaul of the university system, and the abolition of spending initiatives linked to the mining tax.

The education minister, Christopher Pyne, and the health minister, Peter Dutton, have sent strong signals about their willingness to consider tweaks to policies in their portfolios in an effort to overcome a lack of support in the Senate. The government’s efforts to find a pathway forward on the budget were sidetracked last week by comments by the treasurer, Joe Hockey, about poor people’s driving habits while discussing the reintroduction of indexation on fuel tax.

Abbott said Hockey accepted “that he got it wrong, that he made a mistake” in saying that poor people did not have cars or did not drive much.

“He came down to 2GB and fessed up on Ben Fordham’s program last Friday. Look, it was one of those moments. That’s all you can say,” Abbott told 2GB presenter Ray Hadley during an interview on Monday.

“All of us should try to avoid those sorts of moments but the fundamental point he’s making is absolutely sound: this country cannot go on borrowing a billion dollars every single month to pay the interest on Labor’s debt.”

Abbott said no one liked paying additional tax “but in the case of fuel indexation, for the average family it will be about $20 a year in the coming year”. But the proposed increase to fuel excise is one of the measures the Senate is expected to block.

The Palmer United party leader, Clive Palmer, who has sent mixed signals on his preparedness to negotiate a compromise on the GP co-payment, said on Monday the government should close immigration detention centres to save money rather than introduce the new Medicare fee.

Palmer said the government was “wasting so much money locking people up for no good purpose”. In a broader attack on the government’s economic strategy, Palmer told the ABC: “The budget’s very unfair; it’s unfair to all the people living in this country; it robs our children of their future, and it’s not something that we can support.”

Speaking a week before the resumption of parliament after the winter recess, and as the former treasurer Wayne Swan defended Labor’s economic legacy, Abbott said the government was prepared to talk with the crossbench senators. The government understood it had to “deal with the parliament that you’ve got” and he had encouraged all of his ministers who had legislation before the parliament to talk with the crossbenchers.

“What we’re not prepared to do though is sell out the fundamentals and the fundamentals are that we have absolutely got to get this budget crisis back under control,” the prime minister said.

“So what I say to all of the crossbench senators is: if you don’t like what the government is putting up, give us your alternative in terms of how we save money. And there were some alternatives that came up from one of the crossbench members of the federal parliament, and frankly, they didn’t stack up for five minutes.”

In a version of the argument the former Labor government made about Abbott’s approach when the Coalition was in opposition, he said: “The Labor party and the Greens are still saying no to everything. The Labor party in particular is staying no to absolutely everything, because I’m afraid they haven’t changed – they’re still in denial about their election loss; they’re still in denial about six years of shocking government.”

The foreign affairs minister, Julie Bishop, said the government should consider compromising on budget measures within the overall parameters of reducing the deficit, but it was up to individual ministers to work with senators to find a way forward.

“All members of the Senate have a responsibility to ensure the budget is put back on a sustainable footing,” Bishop told the ABC on Monday.

“So, in negotiations with the Senate, including Labor, the Greens and crossbenchers, if they’ve got constructive suggestions to make we should consider them, and history shows that negotiations were undertaken with the Democrats [to pass] the GST and that’s the point I’ve been making; that’s what negotiations should be, finding ways to work together to achieve the overriding necessity of fixing the budget bottom line.”

The finance minister, Mathias Cormann, told the ABC it was “always obvious” that there would have to be adjustments to budget measures because ministers were “realists” and understood the government did not hold a Senate majority.

But he held the line on the overall budget direction: “We would expect that all of our budget measures fundamentally will go through the Senate as they were delivered in the budget in May.”

Cormann cautioned against making assumptions that people’s stated opposition to particular budget measures would not change.

He said the $7 GP fee was aimed at ensuring “affordable and timely access to high-quality healthcare” over the medium to long term. “No pensioner will pay any more than $70 a year for unlimited access to medical services,” he said.

Labor’s health spokeswoman, Catherine King, said it was “incredibly bad health policy to put a barrier in the way of primary care” and the “dud” co-payment should be scrapped rather than amended.

“Obviously the government is having to negotiate because it is bad health policy and everybody, including the AMA, Consumers Health Forum, Public Health Association, the College of General Practitioners and the crossbenchers, Labor and the Greens have all said this is bad health policy,” King told the ABC.

The leader of the Greens, Christine Milne, said minor tinkering would not solve the government’s “failed budget strategy”.

“Tony Abbott is choosing to take money from the poor, the sick, the elderly, the unemployed and leave his friends at the big end of town accumulating more and more wealth,” Milne said.

The independent senator Nick Xenophon told the ABC: “The government talks about an adjustment here and an adjustment there; it reminds me of going to the chiropractor, whereas in fact I think this budget needs some general anaesthetic and radical surgery.”

The shadow treasurer, Chris Bowen, said the government lacked a coherent strategy and was pursuing a “fundamentally unfair” budget. “There’s still white hot anger in the community about this budget’s impact,” Bowen told the ABC.