Joe Hockey signals more budget cuts need to be made to pave way for new defence, security spending

Updated

Treasurer Joe Hockey has signalled more budget cuts are on the way, saying the Government has "no choice" but to look for new savings.

The move has been prompted by the failure to win Senate support for billions of dollars of budget measures and new spending on security and the defence mission in the Middle East.

In August, the Government announced a $630 million funding boost for security and intelligence agencies to better deal with the threat of terrorism.

And the Government has also estimated that the military deployment to the Middle East will cost about $500 million per year.

Mr Hockey said it is "money well spent" but he is looking for ways to cover it.

"There have been a number of initiatives already announced which are very important, such as increased funding for security, we need to identify the savings that help to pay for those sorts of new initiatives," he told AM on Wednesday.

"We are, again, carefully and methodically going through the budget."

He told Fairfax radio the Government was "working them through".

"We have to, we've got no choice," he said.

Mr Hockey said the cuts will be revealed in December in the mid-year economic and fiscal outlook (MYEFO) budget update.

But key Senate crossbencher, Family First senator Bob Day, told tonight's 7.30 that the Government should press on with negotiations over the existing measures.

"What's the alternative? Is it going to be cuts to [state] grants? Is it going to be increasing taxes, charges, levies?" he said.

In Question Time, Opposition Leader Bill Shorten asked Prime Minister Tony Abbott for details about the fresh cuts.

"What are the new ideas that the Treasurer's working on to inflict new pain on the Australian people?" he asked.

It was batted away by the Prime Minister, who pointed to Labor's failure to produce a budget surplus and promised that "this Government will deliver a budget surplus for a strong economy".

And when asked by Mr Shorten whether he was "firmly committed" to all of the budget measures, Mr Abbott delivered a one-word answer: "Yes".

The Government has failed to win support for billions of dollars in budget measures, including the $7 GP fee and the reintroduction of the petrol excise.

But Mr Hockey has rejected a report in the Australian Financial Review that he was preparing to beat a retreat on the budget measures.

"The bottom line is: if you can win a battle, you take that victory, but you never give up on the war," he said.

"If there is an inability to get a majority of the Senate, we are going to continue with the principles and we are going to continue with the policies because ultimately what we are doing is right for Australia.

"You never give up on doing what is right for the country."

Mr Abbott has also restated the Government's commitment to the May budget.

"We don't walk away from anything - we stand by everything," he said.

Abbott flags possible restructuring of welfare legislation

But the Government is prepared to change its parliamentary tactics by offering to split legislation for some of its welfare changes, to ensure that some aspects can pass with Labor support.

"We are prepared to facilitate speedy and efficient passage of those measures they agree with," Mr Abbott said.

But he said it should not be viewed as a backdown.

"In flagging the possible restructuring of the social services legislation, we're not walking away from anything, we support all of the budget measures but we accept that some of them are supported by other parties," he said.

"Some of them are still subject to negotiation with other parties and with the crossbench."

The Federal Opposition supports about $3 billion of family benefit cuts, including:

Dropping the primary earner income limit for FTB-B from $150k to $100k

Cutting the FTB-A large family supplement

Cutting an add-on for additional children to the higher income-free threshold

But shadow treasurer Chris Bowen said the deal had not yet been struck.

"There are some measures here we would vote for if they split the bill and we would oppose the entire package if they refuse to split the bills," he said.

"The Government's had plenty of time to work out how they're going to deal with this - they're at sixes and sevens today."

Topics: government-and-politics, budget, defence-and-national-security, defence-forces, hockey-joe, security-intelligence, australia

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