Government won't rule out further budget cuts

PRIME Minister Tony Abbott has not ruled out further budget cuts, or new revenue measures, in next year's budget as Treasurer Joe Hockey prepares to release the mid-year budget update.

After what he described as a "ragged week" for the government, Mr Abbott said the proposed GP co-payment and his signature paid parental leave would remain.

His comments came after Deloitte Access Economics released a report showing the budget deficit was forecast to balloon by $4.9 billion to $34 billion.

The growing deficit follows falls in commodity prices, particularly iron ore and coal. Mr Abbott said the budget remained the government's "ultimate commitment".

Mr Abbott denied the government had approved cuts to education, health and social services payments. He said, however, he was prepared to respond to "changing circumstances".

Asked whether the government would consider deeper cuts or new revenue measures, Mr Abbott did not answer directly but said his general rule was to persist with budget measures until an "alternative way forward is established".

"Plainly there are some things which are going to have a lot of difficulty in the Senate," he said.

"We stand by them - we absolutely stand by them - but, if plan A is in trouble, obviously you contemplate a potential plan B.

"But as far as I'm concerned, I want Plan A implemented because that is the right plan, that is the best plan." Mr Abbott said the government was still committed to the budget and he believed the fundamentals were right but he would seek further efficiencies.

He said the government would not be looking for "massive additional savings", but the focus was on "sensible efficiencies".



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