The Abbott Government's plan to charge the sick a $7 co-payment for Medicare services appears dead, with key members of the Senate vowing to reject the proposal.
Independent Nick Xenophon signalled yesterday he would vote against the plan, describing it as "dumb policy" and "dumb politics".
And other measures including key plans to overhaul the universities sector are in serious doubt as Tony Abbott's first Budget struggles to win support.
The co-payment, which will help fund a $20 billion medical research fund, has proved to be one of the most contentious parts of the Budget.
With the Greens and Labor opposed to the proposed payment, the Government needs to win over a coalition of crossbench senators to put it in place from the middle of next year.
Senator Xenophon has now joined with the Palmer United Party - which is set to be backed by its coalition partner, the Motoring Enthusiast Party - in saying no to the measure.
Senator Xenophon, who revealed he had not yet been approached by the Government over the plight of the Budget's key measures, said he was mystified by the policy.
"I just don't get it - I don't get the policy or the politics," he told The West Australian.
"We're going to end up loading up the hospitals with people suffering acute problems because we didn't deal with those problems when we should have."
Senator Xenophon said he was concerned about the administration side of the co-payment, arguing the costs on doctors and the health system would be "extreme".
With PUP, the Motoring Enthusiast Party, the Greens and Labor opposed, there is no way for the Government, which has 33 votes in the Senate, to get the 39 necessary to pass the co-payment plan.
It is not just the health initiatives that are in danger.
Senator Xenophon said the changes planned for universities, particularly those that will increase student debts, were of particular concern.
"I don't think people would be so viscerally opposed to the Budget if the Government hadn't looked like it was hitting the poor while letting the top end of town get off scot-free," he said.
Treasurer Joe Hockey, who said the Government would not negotiate over the co-payment, suggested an oppositionist Senate would face its own troubles.
"If the immediate answer of everyone in the Senate is no, then I think the Australian people have a low, low tolerance for that," he said.
The Government is so far assured passage through the Senate of just two key measures - the reintroduction of the indexation on fuel excise and the deficit levy.
The fuel excise change, supported by the Greens, will reap $2.2 billion over the forward estimates period. The deficit levy will raise $3.1 billion.
Labor's Senate leader Penny Wong, who confirmed the ALP would not oppose the deficit levy, said the Government would get few favours in other areas.
"We're not for moving when it comes to things like changes to the pension, we're not for moving when it comes to cuts to health and education," she said.
The single biggest saving measure in the Budget, a $7.6 billion cut to foreign aid, does not need Senate support.