Senate stoushes could cost budget $112 billion over next decade: Parliamentary Budget Office

Savings worth more than $112 billion over the next decade are yet to pass the Parliament, according to new research.

The Parliamentary Budget Office (PBO) had tallied the cost of 30 Abbott Government measures that had been announced but not yet legislated.

Many were part of the May budget and some had already been voted down by the Senate.

The PBO research found the budget would take close to a $23 billion hit over the next decade if the Government was not able to reduce the indexation of the age pension by linking increases to inflation.

Abandoning new Medicare co-payments could cost more than $13 billion over the same period.

The research was requested by Liberal MP Andrew Laming and distributed to all MPs, Senators and staff yesterday afternoon because his request was not marked confidential.

The Opposition claimed Mr Laming, who had publicly criticised some of the Prime Minister's decisions, made the request as part of a plan to prepare an alternate budget ahead of a possible leadership change.

Federal Cabinet had been revising its budget strategy and ahead of a meeting last night Mr Abbott tried to put a positive spin on the state of the nation's books.

"This week obviously the Treasurer will be releasing the Intergenerational Report, and while that shows the scale of the budget problem, it also shows the extent of the progress we've already made," he said, in a statement to his colleagues and TV cameras.

Palmer United Party to vote against more legislation

Passing contentious budget measures through this Senate had always been tricky for the Abbott Government but the process seemed to be becoming even more complicated.

Yesterday, Clive Palmer announced his two PUP Senators would abstain from voting for legislation due to "policy and leadership uncertainty in the Coalition".

His position now seemed to have hardened further.

"We won't be abstaining, we'll be voting against major legislative proposals," Mr Palmer said.

"The Government should be in a caretaker mode while all this rubbish is going on."

When asked exactly what he meant by that statement, he said; "Well we don't know who will be the leader, we don't know what the policies will be, I mean, Australia needs some confidence."

"They need six out of eight Senators to get anything up and if they've got people voting against them, I can't see how they can do that.

"Things that have got bipartisan support or minor measures we may vote for."

Last night, PUP Senators helped Labor and the Greens vote down the Government's plan to introduce a new watchdog to monitor registered organisations, including unions and business groups.

But Employment Minister Eric Abetz declared he would reintroduce the legislation as soon as possible.

"The Government is committed to pursuing this fundamental reform to ensure that the Michael Williamsons and Craig Thomsons of tomorrow don't get a chance to rip off hard working union members," he said.

Business Council calls for slower budget strategy

Meanwhile, the Business Council of Australia (BCA) backed the Prime Minister's view that last year's budget was too "ambitious" and argued this year it should make only "modest" savings with no "big bang adjustments".

The nation's peak group for big business had been urging a slower strategy to improving the budget's position and was calling for a bipartisan agreement that a 10-year plan was needed to gradually return to surplus.

"We need to do the careful incremental work of redesigning our big programs of spending and explaining that to the community," BCA CEO Jennifer Westacott said.

"But most importantly making sure that we slowly and carefully make those transitions because we can see that big bang adjustments are rejected by the community," she said.

BCA's budget submission said the May budget should "avoid new spending commitments" and "seek to implement only modest savings".

The position essentially endorsed the Treasurer Joe Hockey's approach to his second budget which he had said wouldn't involve major cuts and wouldn't hurt families.

The BCA made suggestions on "unfinished business" from last year's budget, including the plan to allow universities to set their own fees.

"The basic elements of the package are sound. Could there be better safeguards?

"Could we look at the way loans are organised? Yes, so let's do that," Ms Westacott said.

The Council had also proposed the Government reconsider its plan for pension indexation.

"Let's take those out and put them as part of the McClure Review, so that they're aligned with proper welfare reform."

Ms Westacott had reiterated her opposition to the Government's policy to force young people to wait six months before they could get unemployment benefits.

Amid the continuing leadership speculation, Ms Westacott acknowledged "the leadership issue is obviously a difficult issue for the government, a difficult issue for policy certainty".

"What matters to business is that we actually get on with the policy reform in this country, that we're able to get our budget under control and a more competitive tax system," Ms Westacott said.