The coalition says Labor's proposed five per cent corporate tax cut and HECS-free science degrees will put at least a $54 billion hole in the budget.
In his budget reply speech, in a bid to kickstart innovation, Opposition Leader Bill Shorten offered a bipartisan deal on a 25 per cent corporate tax rate and pledged 100,000 science and maths students would not have to pay HECS under a Labor government.
Mr Abbott described the tax cut and other promises as "peddling false hope".
"It's magic pudding economics of the very worst sort," he said, adding that the cut was previously proposed by Labor as part of the 2010 failed mining tax package.
The education department had costed the university policy at $2.25 billion, Education Minister Christopher Pyne said.
Taken together with the government's estimate of a $52 billion hole in Labor's pledges to date, it comes to just over $54 billion.
Mr Shorten said the prime minister was frustrated that Labor was "engaging in the battle of ideas".
He dismissed the education department costing of the scholarships plan, saying the figure was more like $45 million.
"(Christopher Pyne) is the most discredited higher education minister the federation has ever seen," Mr Shorten said.
Mr Pyne confirmed on Friday he would, in coming months, bring back his bill to allow universities to charge higher fees as the government scaled back its funding.
The bill was rejected by Labor, the Greens and crossbenchers in the Senate in March.
Asked about his costings, Mr Shorten said Labor had so far proposed $21 billion in budget savings including $7 billion in chasing down multinational tax dodgers and $14 billion from high-end superannuants.
Treasurer Joe Hockey said the opposition was looking in the wrong places for savings.
"You're never going to repair the budget by just going after rich people, no matter what happens," Mr Hockey said.
"The budget repair needs to be everyone putting in an effort."
One of the biggest impacts on the budget, iron ore prices, is expected to be examined in an inquiry which appears to have the support of the prime minister.
"We do need to know the facts ... what we don't want to see is predator behaviour by any company," Mr Abbott said, when asked about the possible anti-competitive actions of iron ore producers.
The prime minister also defended the government's $20,000 instant asset write-off for small business, which Labor says won't generate long-term jobs.
He said tradies could buy a ute or offices could be recarpeted.
Shadow treasurer Chris Bowen said the budget papers had failed to show how the small business tax break would be funded.
Share
