Treasurer Joe Hockey warns of more cuts to come if Labor, Greens refuse to negotiate on budget cuts

Updated

Treasurer Joe Hockey has warned he is ready to bypass Parliament and force through new spending cuts if Labor and the Greens do not come to the table on billions of dollars of budget savings.

The Government is struggling to win support for a number of controversial budget changes, including plans for a co-payment on doctor visits, and moves to increase the fuel tax.

If they are not passed the Government faces a multi-billion-dollar hole in the budget bottom line.

Mr Hockey says he will have to look elsewhere for savings if the Senate is not willing to negotiate.

"I say to the Labor Party and to the Greens - if your instinct is to say 'no' immediately and to stick with that, you are dealing yourself out of having an influence on public policy," he told ABC radio's AM program.

"Because if the immediate reaction is 'no', with no opportunity to open discussions in relation to matters, then there are other alternatives that we can take.

"We are open to discussions - as any reasonable Government would be - but we are not going to step away from the fact that the budget needs to be repaired."

Mr Hockey said that if the Senate continued to block the Government's plans, he was prepared to look at budget cuts that did not require legislation.

He said any decision to make further cuts to the foreign aid budget would not require parliamentary approval.

Labor says it is willing to negotiate with the Government, but points out that the Treasurer and Finance Minister have both previously ruled out making changes.

"Today he's talking about alternatives, [but] we've been told there's no alternatives," shadow treasurer Chris Bowen told Radio National.

"He and Mathias Cormann keep saying this is the only choice, there's no alternative to this budget.

"So if the Treasurer wants to put up alternatives, let's get rid of the bluff and bluster and the beating of the chest with which he specialises, and get down and tell us what the alternatives are."

But Mr Bowen said Labor was not willing to compromise on its values, describing the budget as unfair and one which "attacks our social fabric".

Palmer United Party leader Clive Palmer said voters would punish the Coalition at the ballot box for any "irrational" cuts.

"I don't think we're frightened at what Joe Hockey says," he said.

"If Joe Hockey does that, if he just tried to hurt people for the sake of hurting people, the Australian people will throw the Government out at the next election - there'll be a new government."

Key budget measures missing from Senate to-do list

The Senate will sit for extended hours this week as it tries to get through a backlog of legislation, although several key budget measures are missing from the list.

Legislation to increase the fuel excise from August 1 will not be debated this week, meaning it cannot pass the Senate in time for the change to take effect.

The Government had also intended for welfare changes to come into effect from the middle of this year, but they too have been held up.

One measure the Senate has already blocked is the Government's plan to scrap future personal income tax cuts that were legislated by the previous government.

Labor set in train a tax cut to take effect next year, as part of the compensation package for the carbon tax.

The Government wants to repeal the personal income tax relief, arguing it is no longer needed given the carbon tax will be gone.

But Labor, the Greens and the several crossbench senators have blocked the Government's attempt, prompting the Treasurer to introduce the legislation again.

Mr Hockey has called the bill 'Labor 2013-14 Budget Savings', because he said Labor had planned to defer the tax cut before it lost the election.

"Since the election, they have failed to keep their promise to the Australian people," he told Parliament.

"We are now introducing legislation to allow the Labor Party to keep its promise to the Australian people to fix the budget."

Topics: government-and-politics, federal-government, budget, australia

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