Prime Minister Tony Abbott says he won't surrender his budget in the face of pressure to compromise over its most unpopular measures.
Mr Abbott is confident the coalition's first budget will pass the Senate because the alternative would be a double dissolution election.
Senior government ministers have signalled compromising on key budget reforms such as higher education interest rates and the GP co-payment, amidst a fierce public backlash and a hostile Senate.
Continuing the budget sell on Saturday, Mr Abbott said his team "absolutely" understood the "iron necessity" of sticking with difficult and unpopular budget measures.
"We are not going to surrender our budget commitments," Mr Abbott told reporters in Adelaide.
But negotiations were inevitable.
"You have got to negotiate your legislation through the parliament," he said.
Mr Abbott was confident that the government would get the budget through the Senate in the end, because the alternative would be a double dissolution election.
"Because let's face it, there have been many governments over many years that have had to negotiate budgets through the Senate.
"The only time that wasn't successfully done ... that was a different bill in 1975."
Last week, Mr Abbott appeared to back away from a threat to hold a double dissolution election after earlier signalling incoming Senate cross-benchers would be unlikely to keep their seats if there was a new election.
Labor, the Greens and Palmer United Party have vowed to block changes such as the Medicare co-payment and pension cuts.
Education Minister Christopher Pyne, who has faced a slew of student protests this week over university deregulation measures, has signalled compromising on some reforms.
He said it was in recognition the government did not have a majority in the upper house.
"We will of course seek to consult and negotiate with the minor parties and the crossbenches to ensure these important reforms are delivered," Mr Pyne said in a statement to AAP.
The industry is also being consulted to "refine the details" of the changes, with two higher education stakeholder working groups providing feedback.
Opposition finance spokesman Tony Burke said the government's willingness to compromise showed it was in disarray and its budget unravelling.
If any measures change in the parliamentary process, Labor will apply the same "tests" to vote them down in the way it's opposing changes affecting pensioners, university students, Medicare, and fuel and cost-of-living prices.
"If they want to keep changing the budget because they're in disarray and chaos, we will keep applying the same principles," Mr Burke told reporters in Sydney.
Meanwhile, the Australian Medical Association is set to hold urgent talks with Health Minister Peter Dutton to seek a compromise on all medical co-payments flagged in the budget.
A vote was passed at the group's national conference on Saturday to push to have the payment targeted at higher-income earners.
The group is concerned co-payments will hit vulnerable groups hard and add pressure on hospitals.
"The health minister has made it clear he wants to engage with the profession about the future of the health system," president Steve Hambleton said in a statement.
"The AMA is well-positioned to help the government design a fairer and more equitable model."
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