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Joe Hockey's threat to bypass the Senate by ordering spending cuts outside of parliamentary approval has touched off a new Labor scare campaign and sparked concerns within the government over the Treasurer's judgment.
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Battle of the scare campaign
Old scare campaigns about the Commission of Audit and the carbon tax were refreshed in question time on Wednesday.
With voters offside and crossbench senators showing no signs of complying with unpopular budget measures, some Liberals complained that the Treasurer's move had ''predictably'' brought the opposite effect, branding his threat to cut other spending ''unwise'' and ''a distraction''.
They revealed Mr Hockey's move had not been part of the agreed government strategy for the day, which had been to press the opposition exclusively on the carbon tax repeal.
One senior figure asked why Mr Hockey had seen fit to open up another front.
''It was a gift to Labor … they did what you would do in that case and started picking us off, demanding that we say where the cuts will be, we would've done the same, it was an own-goal,'' the frontbencher said.
Another long-time Liberal said the budget was in trouble because it lacked consistency with the ''only unifying thing being how it has unified our enemies''.
The complaints came after Mr Hockey used a series of interviews on Wednesday to toughen the budget rhetoric.
''If the Senate chooses to block savings initiatives then we need to look at other savings initiatives that may not require legislation,'' Mr Hockey had said.
A crossbench source, who wished to remain unidentified, said Mr Hockey's comments were a sign of his ''inability to negotiate with the crossbench''.
On Thursday, the Treasurer, dismissed reports he was facing internal party criticism over his comments as ''just a report of a rumour''.
''You just shouldn’t believe rumours,'' he told the Nine Network.
Mr Hockey said the government was working hard to get what it laid on the table through the parliament.
He agreed some of his budget measures meant Australians would have to make sacrifices.
''I know there are things in this budget that are difficult for everyday Australians,'' Mr Hockey told the Nine Network. ''But also I know if we don't move now it (the budget position) is going to get worse.''
Mr Hockey again blamed Labor for the budget impasse, saying ''now they've gone into opposition they are opposing everything we are doing''.
''When we were in opposition we supported 80 per cent of their savings,'' he said. ''We've just got to press on . . . it's a marathon not a sprint and we are very focused on doing what is right over the medium and long term for the nation.''
Asked about the political influence of the Palmer United Party bloc in the Senate, Mr Hockey said the balance of power party had been ''put in this position'' because Labor and the Greens were opposing ''everything'' the government was seeking to do.
Opposition frontbenchers immediately capitalised on Mr Hockey's threat, issuing press releases on a portfolio by portfolio basis challenging the government to expressly rule out further cuts to services such as health, education, social services and foreign aid.
In question time, Labor pursued Prime Minister Tony Abbott, calling on him to rule out adopting harsh aspects of its recent Commission of Audit report such as an even higher GP co-payment of $15 per visit, the calculation of the family home in the pension assets test, the scrapping altogether of Family Tax Benefit (Part B), and other cuts to hospitals and schools.
Amid the concerns over ill-discipline and mixed messages, a new Liberal senator has set out a radical libertarian program in his maiden speech, calling for the GST rate to rise to 15 per cent, federal health and education departments to be abolished and the ABC to be sold if it fails to address perceived left-wing bias.
James McGrath, a former Liberal Party deputy director, also defended people's right to say ''hurtful and bigoted and stupid and dumb things''.
But the government has some reason for confidence with one of the new senators calling on his colleagues to recognise the seriousness of the budget challenge and pass savings measures.
Liberal Democratic senator David Leyonhjelm turned on his fellow crossbench senators in the Palmer United Party, arguing they needed to wake up.