Ms King has also welcomed a review of the Pharmaceutical Benefits Scheme – which could see access to some common pain killers curtailed while also seeing some common painkillers such as Paracetamol that are currently subsidised struck off the register to save money – as a sensible measure.

Health Minister Sussan Ley said on Sunday there was a strong argument for over-the counter-drugs such as Paracetamol, which costs taxpayers $73 million a year when accessed under the PBS, to be taken off the scheme.

"We want to make sure we have a quality use of medicines policy, pharmacists are very much part of that, this is not about people rorting the system this is about cost to government, affordability for consumers and the best deal across the medical supply chain," she said.

"The government is paying a lot of money for people to access panadol and other over-the-counter medications at their chemist, on script, that's not necessarily sustainable."

But Ms Ley would not confirm the review of drugs covered by the PBS could deliver up to $1 billion in savings to the budget bottom line.

With the Abbott government's second federal budget due to be handed down in a little over two weeks, Ms King said it was good the government was finally consulting over where to find savings in the health system after being "at war with doctors for two years".

The Abbott government's first budget set out $80 billion in cuts to public hospital and schools funding over a decade, drawing furious reaction from the states.

On Friday, Treasurer Joe Hockey said federal government spending in those two key areas would continue to rise every year but stressed that schools and hospitals were run by the states and warned "there is no bottomless pit of money in Australia".

Ms King said any savings found in the review of Medicare, announced by Ms Ley on Wednesday, "need to be reinvested back into health care".

She suggested that the pre-budget timing of the announcement indicated further cuts to health funding would be unveiled in the budget.

"I want to advocate that we continue to make sure we are able to provide decent and affordable care for people in this country and it is important we reinvest savings," she said.

"It is very clear, from what all of the states and territories are saying, in terms of the demand for hospital services that is coming their way, they can't meet that demand."

Ms King said the federal government was using the ongoing fight with state governments over health funding as "a stick to beat them up to accept a GST hike".

A families package that will give low and middle income earners more support with the cost of childcare, while reducing the support available to the well-off, will help form the centre piece of the budget.

Those changes are expected to be revenue neutral and at least some of the details are expected to be unveiled before the May 12 budget.