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Abbott and Hockey pressed to soften federal budget

Date

Mark Kenny Matthew Knott Dan Harrison

Illustration: Matt Golding

Illustration: Matt Golding

Pressure is building on Tony Abbott to water down key aspects of the budget and even to consider bringing forward the promise of income tax cuts to soothe jangling marginal seat nerves.

Senior ministers are flagging a preparedness to compromise in their portfolios in the face of entrenched opposition from interest groups and minor party or independent senators.

Two of the biggest spending ministers, Education Minister Christopher Pyne, and Health Minister Peter Dutton have signalled that negotiations would see some ground given.

The Coalition is bracing for the return of Parliament next week after disastrous post-budget polls and a sales job that has all but run off the rails.

After a week of hostile talkback radio sessions, and that now infamous prime ministerial ''wink'', a Coalition party-room meeting on Tuesday looms as a potential flashpoint for both Mr Abbott and Treasurer Joe Hockey.

Disgruntled MPs are set to use the opportunity for some plain speaking over the budget strategy, although the absence of senators from the meeting due to estimates committee duties, may take some heat out of the occasion.

One Liberal quipped that it might be time for the Prime Minister to ''blink again'', referring to the possibility of retreat on some policies, such as the unpopular move to set the pension age at 70 by 2035.

Backbench MPs and senators contacted by Fairfax Media say the pension age is perhaps the hottest objection to the budget.

Mr Pyne says he is willing to compromise on university reforms - including the vexed issue of increased interest rates on student debts - to make them law.

But he will stare down calls from the sector to delay changes, which include a full deregulation of university fees, saying he will introduce legislation into Parliament this year.

''I want the whole package to pass but I am realistic to know not everything will pass the Senate,'' Mr Pyne said on Friday.

''There is a lot of robust discussion and I'm happy to engage with the university sector about how to make this work.''

Mr Pyne nominated changes to the HECS interest rate and repayment threshold as two areas where he is open to negotiation.

Mr Dutton also signalled that he is willing to negotiate with crossbench senators to get the proposed $7 payment for Medicare services through Parliament.

But the controversial measure appears unlikely to make it through the upper house anyway, with Labor, the Greens and the Palmer United Party all opposed.

Asked if he was prepared to negotiate on the measure to secure its passage through Parliament, Mr Dutton said: ''Legislation hasn't been introduced yet.''

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