Treasurer Joe Hockey has played down reports the government will strike a deal with Labor on pensions and family payments that would leave him with a $9 billion budget hole.
"You don't believe everything that you read, certainly in relation to the comments of the Palmer United Party but also from the Labor Party," he told the Nine Network on Sunday.
The government is reportedly planning to put on ice cuts some of the budget's most contentious measures to get Labor's support in the Senate for other welfare changes.
Labor will back a comprise that ends family tax benefits for families earning more than $100,000 and includes a stricter means test for the seniors' healthcare card, News Corp Australia says.
Mr Hockey shied away from suggestions he has done a backflip on the budget - and warned that any revenue shortfall would have to be raised some other way.
"Because if we do not get the budget back to surplus there will be greater pain in the future for everyday Australians," he said from the G20 meeting in Cairns.
Labor's families spokeswoman Jenny Macklin said the tough welfare measures should be dumped "for good".
"Joe Hockey should be listening to pensioners, to families, to young people who are doing it tough in Australia," she told reporters in Melbourne.
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