A senior federal government minister has rejected reports Tony Abbott will go to the next election promising spending cuts to health and education as part of a long-term strategy to balance the budget.
"That's not what he said," Education Minister Christopher Pyne told ABC radio on Tuesday.
Mr Abbott, in a speech to the Australia-Canada Economic Leadership Forum on Monday night, insisted the government would honour pre-election commitments to maintain health spending and school spending.
But the prime minister said the rate of spending growth in the longer term had to be reduced if good schools and hospitals were to be sustainable.
Mr Pyne said it was true that current growth in health and education expenditure was unsustainable but the prime minister had not flagged any cuts to health or education expenditure.
"It suggests growth in health and education spending needs to be arrested," he said.
However Mr Abbott did flag a trimming of the public sector and the abolition of what he called new bureaucracies, saying they did not create more wealth.
The growth of overseas aid also would be substantially reduced.
The prime minister cited the performance of the Harper government in Canada as an indication of what might be in store for Australia.
The deficit there had been all but eliminated as much through restraining the growth of spending programs by cutting government itself, than through big cuts to existing government programs.
The Harper government had cut taxes, fought against cheque-book government, deregulated the economy and brought a robust common sense to the consideration of international problems, Mr Abbott said.
Labor's Matt Thistlethwaite said the government would attack low- and middle-income earners to reduce the budget deficit.
"Who knows what they've got planned for pensioners," he told Sky News.
Labor, on the other hand, had made efforts in government to get high-income earners and business to pay more tax.
The measures were opposed by the coalition, Senator Thistlethwaite said.
Liberal senator Scott Ryan dismissed Labor claims it had taken steps to reduce the budget deficit.
"A lie repeated does not become a truth," he said, noting the lack of surplus projections.
Finance Minister Mathias Cormann said while there would be no cuts to health and education, the government had to limit spending growth.
For funding to be sustainable, it had to be efficient and well-targeted otherwise the government would have to raise taxes.
"We want to pursue lower taxes," he told reporters.
That meant spending growth in very important areas across government would be as "high as necessary, but as low as possible".
