The prime minister, Tony Abbott, has played down the prospect of the government withdrawing unemployment benefits from people who fail drug tests, saying reports about the option were “highly speculative”.

Labor seized on the declaration as evidence that Abbott had lost control of what his ministers were saying during a crucial time for budget negotiations.

“I think all Australians are appalled that this government can’t maintain the same position for 24 hours without something changing,” the opposition leader, Bill Shorten, said.



On Sunday, News Corp’s newspapers said the government was open to following a New Zealand system of stripping welfare recipients’ payments if they failed a job-required drug test, or refused to submit to one.

The social services minister, Kevin Andrews, was quoted in the front-page stories as saying: “We won't rule this in or out.”

The prime minister also did not rule out the option in a later interview on Channel 10’s Bolt Report, but raised logistical objections to the suggestion and said the budget already included “a lot” of measures on welfare.



“This was a highly speculative piece and I'm just not going to comment on highly speculative pieces,” Abbott told Andrew Bolt. “… as far as I'm aware you couldn't even do that kind of thing without the cooperation of the states, so it doesn't look to me like the sort of things that are likely.”

In a separate doorstop interview, Abbott said of the drug-testing suggestion: “It’s not something that we’re planning; simple as that.”



In coming weeks, the government is expected to release a report on welfare reform, prepared by the former chief executive of Mission Australia, Patrick McClure. Andrews and the treasurer, Joe Hockey, have signalled that the government wants to “simplify” the number of welfare payments and supplements.

The government faces a more immediate challenge in securing the Senate’s approval for some major budget measures. On Sunday, Abbott indicated that he was not ready to concede defeat on the proposed $7 co-payment for a consultation with a general practitioner.

Labor, the Greens and the Palmer United party (PUP) have signalled their opposition to such a fee, meaning the measure cannot pass the Senate before, or after, new senators take their seats on 1 July.

“I don't expect people to like the Medicare co-payment but I do expect people to support the Medicare co-payment,” Abbott said. “The optimism is based on the ability of people, in the end, to see sense.”

Shorten said the budget included large elements that the Labor party under his leadership could never support in the parliament, including pricing Australian children out of university and “wrecking Medicare”.

The planned GP co-payment – due to begin in mid-2015 – has triggered a political history war, with both sides looking to the past to justify their positions.

The Coalition has repeatedly sought to defend its proposal by highlighting how Bob Hawke's Labor government introduced a small fee for GP visits in the early 1990s. It was abolished when Paul Keating assumed the prime ministership.

Labor’s communications spokesman, Jason Clare, told Sky News on Sunday the Labor party had been prepared to stand up to Hawke over the proposal and was therefore willing to fight Abbott’s plan.

Abbott’s senior ministers have also pointed to past comments by the shadow assistant treasurer, Andrew Leigh, in support of a co-payment.

Labor's health spokeswoman, Catherine King, on Sunday noted that Abbott as health minister had denounced a 2005 proposal by Peter Beattie’s Queensland government for means testing and co-payments for non-urgent surgery in the public hospital system.

“This madcap scheme is completely contrary to Medicare,” Abbott said at the time.

The Senate – where the PUP will control four votes from 1 July – will ultimately decide the fate of the latest co-payment proposal.

Asked about last week's highly publicised dinner that Clive Palmer and the minister for communications, Malcolm Turnbull, had together, Abbott said there was “nothing wrong” with the PUP leader having a relationship with senior members of his frontbench.

The government’s planned changes to Medicare and welfare payments will come under more scrutiny this week when Senate estimates committee hearings focus on health and social services.

