Senate powerbroker Nick Xenophon has confirmed he will not support three major planks of the Turnbull government's budget, but has left the door open for negotiation on key industrial relations bills.

Two welfare savings measures will be blocked outright: a plan to make young jobseekers wait four weeks before receiving unemployment benefits, and a cut to the age pension for people who spend more than six weeks overseas.

"There are other priorities the government should focus on": South Australian senator Nick Xenophon has cut a "middle way" on corporate tax cuts. Credit:Pat Scala

The Nick Xenophon Team will also use its numbers in the Senate to limit the government's proposed business tax cuts, a centrepiece of the 2016 budget, to businesses with annual turnover of less than $10 million.

Prime Minister Malcolm Turnbull and Treasurer Scott Morrison want to bring the corporate tax rate down to 25 per cent over 10 years, in an escalating manner that would eventually affect all businesses regardless of size.