"It's a bad principle to axe your own policy for the Greens policy because it means that their priorities are more important than ours.

"That would hardly be a smart move for a centre right government."

The Green Army, which cost the budget about $90 million a year, or $360 million over the four-year budget period, was established after Mr Abbott won office in 2013.

Using funds stripped from Landcare, it aimed to create an "army" of 15,000 unemployed people aged between 17 and 24 to work on local conservation projects such as landscape restoration and species protection.

The decision to scrap the Green Army was taken by the expenditure review committee, or razor gang, more than a week ago.

The savings were used to cover the $100 million, one-off extra payment to Landcare that the Greens demanded in return for passing legislation to establish a backpackers tax. Contrary to Mr Abbott's contention, the Landcare funding boost is a one-off payment and the money saved from abolishing the Green Army will be used for budget repair.

Greens leader Richard Di Natale welcomed the decision to scrap the Green Army, saying it was "a dud" and "a vanity project" for Mr Abbott.

He said it was a lot of money spent for little return.


It was feared inside the government that had the Greens known about the cut to the Green Army last week they might have asked for more for Landcare.

Opposition environment spokesman Tony Burke suggested the Greens had been duped.

"Govt cut $350m from Green Army today. That puts the deal with the Greens for $100m for Landcare into context," he tweeted.

The Green Army cut is believed to be one of the biggest savings measures in the mid-year budget update.

Treasurer Scott Morrison said on Monday he would be writing this week to ratings agency Standard & Poors to update if on the progress towards fixing the budget. S & P is the jumpiest of the three major agencies and is threatening to downgrade Australia's AAA credit rating. The mid-year budget update will be watched closely.

Mr Morrison said he would tell the agency that the government has managed in recent months to secure the passage of about $21 billion in gross savings through Parliament which is about half the cuts being planned to return to balance by 2020-21.

"What the government has to do, is to focus on what we can do to get savings passed," he said.