Tough stance: Treasurer Joe Hockey. Credit:Alex Ellinghausen The heads of the departments of Treasury and Finance published their independent assessment of the nation's finances in the lead-up to the 2013 election, concluding that the budget deficit was on track to hit $24 billion in 2014-15. In his 2014 budget the Treasurer upped the forecast to $29.8 billion and lifted it to $40.4 billion in his December budget update. "If only the Labor Party had've been more upfront about the true state of the budget," he said. Reminded that it had been the heads of the two departments who had signed off on the forecast and asked whether it was wrong, he replied: "Well, yes it was, because it didn't properly account for various losses that needed to be addressed and various capital replenishments such as the Reserve Bank that needed to be addressed."

Treasurer Joe Hockey takes questions from the media on Wednesday. Credit:Alex Ellinghausen Mr Hockey gave the Reserve Bank $8.8 billion to top up its reserve fund in late 2013. The grant added to the 2013-14 deficit rather than the deficit in 2014-15. His warning about further tough budgets came just 24 hours after Mr Abbott had promised a softer approach including a more family friendly budget in May. In question time on Wednesday, Mr Abbott again referred to himself as "the best friend Medicare ever had" and pledged no further changes to Medicare would be advanced without the broad agreement of the medical profession. By the government's reckoning, savings measures worth a combined $21 billion over the forward estimates remain either stalled in the Senate or are yet to be introduced. This figure includes about $7 billion in savings for the proposed Medicare and university deregulation changes, which according to Mr Hockey are still being proceeded with as a matter of necessity even though their success looks unlikely. Both have been substantially watered down in the negotiation phase in a bid to make them more palatable to legislators and less toxic politically for the government.

Mr Hockey denied point blank any suggestion of a rift or differences between him and the Prime Minister after Mr Abbott said on Monday that budget had been "too bold and ambitious" and pledged that the government would no longer pick fights with the Senate that it could not win. "We did, with the wisdom of hindsight, bite off more than we could chew," Mr Abbott had said. The government now appears to be transmitting mixed signals about future policy and the extent of its appetite for difficult reform. Mr Hockey said the government was spending $100 million a day more than it was collecting. "We have to borrow $100 million just to pay our bills and that's the equivalent of two new schools over a week. It is the equivalent of a new teaching hospital. It's - every day - the equivalent of 14 kilometres of new road. So, there is no choice. We actually have to fix the budget and it is a mess that was created by Labor," he said.

Consumer confidence figures released on Wednesday showed a sharp decline in the confidence of self-identified Coalition voters, more than offset by a sharp rise in the confidence of Labor voters. The survey was conducted amid rumblings about a change of leadership in the Coalition and after the Reserve Bank's decision to cut interest rates. Commonwealth Bank chief executive Ian Narev said confidence was being undermined by weaker commodity prices and the political situation in Canberra. "Businesses need the certainty to invest to create jobs," he said. "That requires implementation of a coherent long-term plan that clearly addresses target government debt levels and timeframes, infrastructure priorities, foreign investment, business competitiveness policies and, above all, job creation." "The political position in Canberra, for some time now, has not been conducive to that kind of stable policy making." Economists spoken to by Fairfax Media have identified billions of dollars of potential budget savings available from withdrawing superannuation tax concessions ($13 billion per year), extending the goods and services tax (up to $30 billion), axing discounts for capital gains tax and limiting negative gearing ($7 billion), including the family home in the pension assets test ($7 billion) and more heavily taxing private trusts ($1 billion).

Mr Hockey hit the airwaves again on Wednesday morning but was immediately on the back foot facing questions over his grip on the treasury portfolio. "I am the Treasurer, I will be the Treasurer and I am going to continue to do the Treasurer's role," Mr Hockey told Neil Mitchell on Fairfax Radio's 3AW. Asked if he would remain in the role long-term, Mr Hockey replied: "I am continuing to do the job. I hope to do it long-term. Of course I do, but that's in the hands of the Australian people." The time spent on justifying his own position was a sign of the extent to which uncertainty now surrounds Mr Hockey's performance as the government's chief economic minister. Privately, an increasing number of government MPs admit something has to give.

"If we want to take voters along with us, we're going to have to stop talking in circles," complained one MP. "What are we doing? Is the co-payment on or off?" "Joe and Tony are saying different things," said another. "Joe hasn't changed one iota, and seems to pushing ahead like nothing's happened." Follow us on Twitter