PM agrees with RBA chief's view of budget

Prime Minister Tony Abbott uses Reserve Bank's governor's "prudent and sensible" comments to defend his government's first budget.

Reserve Bank of Australia governor Glenn Stevens

Prime Minister Tony Abbott is using the Reverse Bank governor's (pic) comments to defend the budget. (AAP)

When it comes to the government budget sales pitch, Tony Abbott prefers the views of Glenn Stevens over Martin Parkinson.

Dr Parkinson, the outgoing Treasury boss, believes more time should have been spent talking about tax and spending reform and saying the budget was part of it.

He cited the planned re-introduction of the fuel excise and Treasurer Joe Hockey's comments about the poorest people not owning cars.

The "materiality" of the measure got lost in a debate about what was fair.

Mr Abbott defended his government's sales job saying tax reform started with scrapping the carbon and mining taxes.

He pointed to the comments of Mr Stevens, the Reserve Bank governor, who this week described the budget as a "prudent and sensible" strategy.

"It's never easy to impose additional costs or to even marginally reduce benefits," the prime minister told ABC Radio in Adelaide on Friday.

A former senior Treasury official says criticism of the budget has been made worse because most of the government's focus was on spending cuts that hit those on lower-incomes rather than tax concessions that affected the more wealthy.

"If you had a more comprehensive approach to all these items, I think the government wouldn't be in the pickle that its in at the moment," Mike Callaghan told The Australian Financial Review.

Opposition Leader Bill Shorten described Mr Parkinson's comments as a remarkable intervention.

Mr Shorten said it was another key player who had come out against the budget.

"Joe Hockey now has a real problem," he told reporters in Melbourne.

"He's got his former treasurer Peter Costello saying it's been stuffed up. He's got the Australian people saying it's wrong. He's got his colleagues privately saying he's stuffed up, and now he's got his own senior public servant who says it's not going the right way."

Mr Shorten said it was time Mr Hockey and Prime Minister Tony Abbott gave up on the unfair budget and started again.


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