UPDATE 12pm: BOB Brown today said Julia Gillard had insulted 1.5 million people and was being "divisive'' after she said the Greens do not share the values of everyday Australians and don't understand the importance of a strong economy.

As the Prime Minister warned households to brace for "some pain'' in the May 10 Budget, she ramped up criticism of her minority Government partners after constant attacks by the Opposition that she is too close to the Greens and Bob Brown is the "real Prime Minister''.

Ms Gillard said the Greens had some worthy ideas and good intentions but were only a protest party.

Senator Brown warned the PM there could be "consequences'' and her words "could come back to bite you''.

"I think that's an unfortunate and unwarranted and gratuitous insult and it's not becoming of a Prime Minister to be talking in those ways about millions of other Australians.''

The Greens leader said he would talk to the Prime Minister about her comments because she was wrong.

"It's not unity, it's divisive,'' Senator Brown said. "The Greens are a mainstream party.''

"When she describes 1.5 million Australian Greens voters as people who don't do the right thing or don't have a love of family or nation for goodness sake, there's something amiss by that insult coming from the Prime Minister.

"For some reason the Prime Minister's turned her fire on the very people who are supporting her in government. I'll talk to her about that. She's wrong.''

Senator Brown said he was above returning fire and would never say such a thing about Labor voters or Liberal voters or National Party voters.

Delivering the annual Gough Whitlam Oration in Sydney to Labor Party faithful last night, Ms Gillard tried to paint the ALP as being caught between the two extremes of the Greens and the Coalition.

"The Greens will never embrace Labor's delight at sharing the values of everyday Australians, in our cities, suburbs, towns and bush, who day after day do the right thing, leading purposeful and dignified lives, driven by love of family and nation,'' she said.

"The differences between Labor and the Greens take many forms but at the bottom of it are two vital ones. The Greens wrongly reject the moral imperative to a strong economy.



"The Greens have some worthy ideas and many of their supporters sincerely want a better politics in our country. They have good intentions but fail to understand the centrepiece of our big picture - the people Labor strives to represent need work.'

"We happily leave to the Greens being a party of protest with no tradition of striking the balance required to deliver major reform.''

Labor relies on the Greens for support in the House of Representatives and from July 1 the Greens will hold the balance of power in the Senate.

Senator Brown said while he believed some of Ms Gillard's recent attacks on the Greens were about "product differentiation'' he warned her to be prudent about the deliberate comments she makes in speeches.

"They have to be very measured and they have to measure the conseuqences and sometimes they can come back to bite you,'' he said.

"When you put that brand on to the people your working with in maintaining government, you have to think very carefully about it.''

He said the Greens were economically responsible and had helped save 600,000 jobs and small business by supporting the stimulus package to fight the global financial crisis and stop a recession.

Last month, Ms Gillard described the Greens as an "extreme'' party and Resources Minister Martin Ferguson said they were "basket weavers''.

Ms Gillard said the Coalition led by Tony Abbott had surrendered to fear mongering and in the carbon debate denied the power of markets.

"An extreme leadership powered by an out of touch backbench is now determined on a strategy of opposition for opposition's sake,'' she said.

Mr Abbott used a speech in Brisbane to blame the "Gillard-Brown Government'' for the Budget deficit saying they were "spending too much, taxing too much and wasting too much''.

"Quite possibly, it's the worst national government in Australian history,'' he said.

Ms Gillard began softening voters for a horror Budget but insisted it would be the right decision to protect families and jobs from more severe cuts later.

"Taking some pain now will ensure that households avoid a lot more pain in the future,'' the PM said.

"It's like looking after your health - you can see a GP today or you can put it off and be forced into emergency surgery down the track.''

Ms Gillard vowed to meet her pledge to return the Budget to surplus with a tight rein on spending and to "not take risks with people's cost of living''.

"I will never risk the economy and people's jobs for the soft political option of putting off hard decisions to next time," she said.

Her warning came as Treasury told the Government Japan's earthquake and tsunami will wipe $2 billion this year from Australia's export earnings and make an already tough Budget even trickier to manage.

Treasurer Wayne Swan will hand down his fourth Budget in just six weeks, but the nation's finances are continuing to be slammed by natural disasters.

Treasury has told Mr Swan that revenue will take a big hit from the earthquake on top of the crunch caused by the summer floods in Queensland and Victoria, and Cyclone Yasi.

A Treasury "executive minute'' says export income from iron ore and coal is "likely to be around $2thbillion lower'' directly as a result of Japan's disaster.

Japan is Australia's second largest export market but demand that has helped fuel the resources boom will be hit by damage to ports, coal-fired power stations and steel plants.

"The tragic events in Japan, together with the impact of floods and Cyclone Yasi at home, will clearly mean revenues take a substantial hit in the near term,'' Mr Swan said.

"We'll be framing the Budget in really tough circumstances this year, but we're determined to bring the Budget back to surplus as planned.''

Ms Gillard has also given her most detailed response to Labor's shellacking in last weekend's NSW state election, saying it was a shattering defeat but "the test is what we do next''.

"Our party has come back from punishing defeats before and it can be done again. Remember how hard it was for those like Gough Whitlam who lived the defeat of 1975 to imagine the victory of 1983,'' she said.

She called for a hard and honest look and said the blame for the loss must be shared around.

"Everyone has a theory for what went wrong and given Labor barely got one in four votes, they might all be right,'' she said.

She rejected predictions of Labor's imminent demise.



"I am deeply intolerant of this bunkum,'' she said.

Ms Gillard said Labor needed to be a party of the future and have a genuine contest of ideas.

hudsonp@heraldsun.com.au

Originally published as Brown warns PM of 'consequences'