Joe Hockey has been urged to reboot his budget and scrap the unpopular $7 GP co-payment, with former Liberal treasurer Peter Costello saying governments have to cut their losses.
The Treasurer is struggling to convince crossbenchers to back his budget, with key measures such as the co-payment facing defeat.
Mr Costello said the Coalition should ''reboot the whole argument'' by bringing forward the next intergenerational report, which highlights long-term pressures on government spending.
It should also dump measures unlikely to pass the Senate, he said.
''Sooner or later you have to cut losses,'' he told the Ten Network.
''The $7 co-payment … it's just not going to happen, so let's move on.''
Mr Costello also rebuked his former colleague for complaining that business had not adequately backed his budget.
Mr Costello's advice came as crossbencher John Madigan questioned whether Mr Hockey has empathy for those that would be hit hardest by the unpopular budget.
Mr Hockey met the Democratic Labour Party senator on Thursday as part of his campaign to woo the crossbench.
But Senator Madigan said on Sunday he still believed the budget would exacerbate social problems.
Recounting that the treasurer had described himself as one of the most hated people in the country because of the budget, he said: ''I empathise with him.''.
''[But] I wonder how much empathy he's got for those people who are going to be hit hard by this budget,'' Senator Madigan told ABC television.
Education Minister Christopher Pyne also appeared to criticise the all-or-nothing approach to budget negotiations being taken by some colleagues.
Mr Pyne said he had been texting, phoning, meeting and talking to the crossbenchers for months to convince them of his contentious plans to deregulate university fees.