DAVID CROWE

THE AUSTRALIAN

FEBRUARY 12, 2014 12:00AM

TONY Abbott has signalled that personal benefits could be scaled back in the May budget by declaring that “everyone” had to live within their means, amid signs yesterday of tough measures to repair the nation’s finances.

As the government heralds the end of an “age of entitlement” in federal spending, the Prime Minister acknowledged that individual benefits would be under scrutiny just as much as those going to companies.

The government sharpened the political contest on economic policy yesterday by challenging Labor to end its objections to $20 billion in savings measures being stymied in the parliament.

Joe Hockey also prepared Coalition MPs for tough measures by using their private meeting in Parliament House yesterday to warn them of the weight on the budget from commonwealth debt.

The government’s attacks on “entitlements” have focused on industry assistance in recent months but Mr Abbott accepted yesterday that individual benefits were also a potential problem for the budget.

“We’ve got to ensure that governments live within their means,” Mr Abbott told ABC Radio.

“Everyone has to live within their means, whether it’s a company, whether it’s a family, whether it’s an individual, whether it’s a government. And that’s what this government is on about and that’s what our budget preparations are aiming for.”

Coalition members privately warn that some big spending items, such as the disability support pension, have to be tackled to keep outlays in check.

Assistance to those on the DSP, which is separate from the National Disability Insurance Scheme, is forecast to reach $22.9bn this year and rise to $26.9bn by 2017.

Mr Abbott’s colleagues continue to warn privately against his biggest spending measure, a paid parental leave schemecosting $9.8bn over four years to be funded by a new levy on big companies.

Labor has already positioned itself to target Coalition cuts to personal benefits by attacking a “secretive” review of the welfare system set up by Social Services Minister Kevin Andrews.

“Without widespread input from the public, this is not a serious review into the welfare system,” Labor spokeswoman on families and payments Jenny Macklin warned. “It is just outrageous the government would spend so much money on a dishonest review designed to rip money off some of our most vulnerable people.

“Labor will fight … against cuts to vulnerable Australians, all so Tony Abbott can pay $75,000 to wealthy women to have a baby.”

Mr Hockey yesterday attacked Labor for reversing its position on savings measures worth $5bn since the federal election, making it harder to scale back the deficit in the May budget.

Labor has decided not to support measures it drafted in government, including $2.3bn in higher education cuts, $1.1bn in savings on research tax concessions and is opposing the repeal of carbon tax compensation worth about $2bn.

“They decided to oppose $5bn of their own savings that they took to the last election,” Mr Hockey told Question Time.

The attack is aimed at heightening pressure on Labor to abandon objections to government savings measures in the Senate, as Mr Hockey seeks to add $15bn of his own spending cuts on top of the $5bn in previous government measures yet to be legislated.

Mr Abbott named “fixing the budget” as one of his themes for the year and told Coalition MPs of the importance of the budget to setting the government’s direction. “We will find savings and we identified many billions of savings pre-election,” he told the ABC.

“There are currently $20bn worth of savings before the Senate, all of which were flagged before the election, $15bn worth of Coalition savings and $5bn worth of Labor savings which we adopted and, you know, the Labor Party is blocking all of them.

“They’re not only blocking our proposals. They’re blocking their own pre-election proposals.”