A rapidly deteriorating budget has forced the Abbott government to order massive spending cuts, with the National Disability Insurance Scheme now in the crosshairs.

A range of programs in welfare, health, education and Aboriginal services face immediate cuts and billions more dollars are expected to be ripped out of Commonwealth expenditure in what Treasurer Joe Hockey is signalling will be a horror budget in May.

But the government will proceed with ditching the carbon price, even though it will cost $7.4 billion in revenue forgone, and with scrapping the profitable Clean Energy Finance Corporation, which will return $439 million in revenue over the next three years.