Tony Abbott has tweaked his university overhaul and defence pay offer following a "ragged" week for the coalition.
But the backdown has still not guaranteed the Senate will pass the higher education changes, nor has the restoration of $17 million in allowances been welcomed by the defence community.
The prime minister held a 45-minute media conference aimed at resetting the agenda for the Liberal and National parties which lost power in Victoria on Saturday with the blame widely levelled at Mr Abbott.
"The buck stops with me, so I take full responsibility," Mr Abbott said.
The restoration of allowances for Defence personnel was a response to his own MPs' concerns, rather than targeted at winning over Senate crossbenchers such as independent Jacqui Lambie to unblock other budget measures, he said.
Restoring the allowances will mean discretionary leave, food and motor vehicle allowances will remain.
Senator Lambie, who with Labor accepted a 60,000 signature petition calling for a higher pay deal than the 1.5 per cent annual rise being offered, said: "There is more than enough money in the goddamn budget to pay three per cent."
The government also revealed an agreement with some Senate crossbenchers to keep the interest rate for university student loans at CPI instead of lifting it to the higher bond rate, as well as giving students who are new parents a five-year interest rate pause.
However, the coalition is still at least one vote short of passing its legislation.
Mr Abbott admitted last week had been a "ragged week" for the government.
"(But we've) demonstrated guts, commitment and strength of character," he said.
However, the prime minister acknowledged that policy changes could be ahead.
"If plan A is in trouble, obviously you contemplate a potential plan B," he said.
"But as far as I'm concerned, I want plan A implemented."
Mr Abbott admitted breaking his promise on ABC funding, saying the cuts to the public broadcaster were "at odds" with what he said just before the 2013 election.
Hiking tax on the highest income earners was also "not in compliance" with coalition pre-election promises, he said.
But he insisted both were reasonable and fair things to do.
The government remained totally committed to the GP co-payment, despite reports it had been shelved.
This commitment would continue until the government decided "there is an alternative way forward which, under all of the circumstances, makes sense", Mr Abbott said.
The prime minister is contemplating changes to his paid parental leave scheme in the light of "internal and external" criticism.
Opposition Leader Bill Shorten said it had been a year of "dysfunction, deceit and disappointment" for the coalition.
"Australians know this government is adrift," he said.
Mr Shorten predicted the mid-year economic review to be released in coming weeks could be the last for Treasurer Joe Hockey.
Mr Hockey went on the attack in question time, accusing the previous Labor government of "rorting" regional grants and, more generally, driving the budget deep into deficit and debt.
"I think the Australian people deserve an apology for the contempt (Labor) have shown for taxpayers' money," he said.
Agriculture Minister Barnaby Joyce likened Labor to creating a pigsty then complaining about the noise of the vacuum cleaner used to tidy up the mess.
