"It doesn't want to come up with constructive solutions for the problems that Labor created. Prime Minister Tony Abbott has attacked Opposition Leader Bill Shorten's budget-in-reply speech. Credit:Andrew Meares "And this is the problem." He repeated lines uttered by government MPs earlier on Friday that Labor was "in denial" about Australia's "debt and deficit disaster". Labor, the Greens and crossbench MP Clive Palmer have all accused the government of deliberately overstating Australia's debt problems to impose its political agenda.

"There are lots of things that have happened in this budget that many people would prefer hadn't happened," Mr Abbott said. "You've got to act decisively to turn the country around and the point I keep making is that eventually you don't control debt, debt controls you.'' Key elements of the Abbott government's economic strategy have been thrown into chaos after Mr Shorten declared its first budget a document based on lies and committed the Labor opposition to combine with the Greens in the Senate to block them. The move signals Labor's intent to replicate the Abbott opposition style of no compromises in an approach that could force the government into grinding line-by-line negotiations in the Senate both now and beyond July when the new senators alter the balance of power. Mr Abbott said on Friday that he was confident he could negotiate to get the budget through the minority-held Senate, but called on Labor to play a more constructive role.

"I think what we saw last night is a Labor Party which is in denial about the debt and deficit disaster that it created," Mr Abbott said. Making his first post-budget address-in-reply speech as Opposition Leader, Mr Shorten rounded on Mr Abbott for breaking promises. He vowed to block punitive changes to Newstart that would force some young unemployed people to exist without the dole, along with a shift in the pension age to 70, tightening of Family Tax Benefit Part B eligibility relating to children aged over six, and the move to restore twice yearly indexation to fuel excise. The planned $7 per visit charge for seeing a GP will also be blocked, with Mr Shorten slamming it as "ideological" and more akin to the hardline right-wing policies of the Tea Party in the US. However Mr Shorten declined to propose alternative savings. The unusually strong action on budget legislation represents a political risk for the opposition and could even push the government into seeking a fresh election – something Mr Abbott toyed with in an interview on Wednesday but stepped back from on Thursday and again on Friday, adopting a more conciliatory tone and saying they would work to get their agenda through parliament.

On Friday, Mr Hockey told a breakfast event in Melbourne that Mr Shorten's reply to the budget resembled someone standing over the twisted metal of a train crash and saying, "there's no problem here". "His solution is no solution. It's just a political response, not a policy response," he said. "I don't think Australians will take him terribly seriously. I'm not going to waste my time responding to him." Social Services Minister Kevin Andrews said on Friday that it was the Labor opposition that was in denial in response to a question that the basklash over Mr Hockey's budget indicated many measures were too high. He shifted the blame to Labor and repeated the government's view that the country's finances were in a mess.

"Frankly, Mr Shorten is in total denial," Mr Andrews said. Loading "Elisabeth Kubler-Ross described denial as the first stage of grief and that is where Mr Shorten obviously is. "He offered no solution last night to paying down Labor's record debt."