Abbott threat to scupper Budget

Tony Abbott is threatening to poke huge holes in the Gillard Government's first Budget to deny the Prime Minister her boast of delivering a surplus in time for the next election.

The Opposition Leader, who has made no secret of attempting to force an early poll, signalled yesterday that he would oppose attempts to slash middle-class welfare.

Mr Abbott said the decision to freeze indexation of the cut-off point for family benefits at $150,000 had effectively redrawn the definition of a well-off family.

"This is a government which thinks that a policeman married to a nurse is part of a super rich family," he said.

"This is a government that thinks that two schoolteachers living as a family in Sydney are super rich."

Mr Abbott, who delivers his Budget reply speech tonight, said the Government had shied away from tackling its own waste and instead picked on "aspirational" families.

Blocking some of the major savings announced in the Budget would punch a $1.3 billion hole in the Budget over the next two years, making it almost impossible to reach the forecast $3.5 billion surplus in 2012-13. The changes to family tax benefits alone are worth $500 million over the coming two years.

Savings of $300 million have been booked by restricting the dependent spouse tax offset, $240 million from changes to family trusts and almost $200 million from the planned overhaul of the fringe benefits tax on company cars.

The Opposition has already succeeded in stopping the Government's plan to means test the private health insurance rebate which would save $500 million a year.

Labor will have to negotiate with the crossbench to see its Budget pass the Lower House and be reliant on the support of Family First's Steve Fielding, independent Nick Xenophon and the Greens in the Senate.

Julia Gillard said Mr Abbott could not shirk responsibility by leaving passage of the Budget up to the Government's negotiations with the Greens.

"He can wander around with his criticisms, but at the end of the day he's got to make a decision - if he himself can't add a budget up, and we've seen no evidence that he can, then he should pass this Budget, which is right for our economy now," the Prime Minister said.

"If Mr Abbott wants to put a view about this Budget, if he reckons he doesn't like a cutback in this Budget, he's got to nominate an alternate cutback which passes the Treasury test."

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