Finance Minister Mathias Cormann has all but confirmed the Abbott government will impose a deficit tax levy on high-income earners.
An "immediate special effort" is needed to bring the federal budget under control, he told reporters in Canberra on Wednesday.
That effort will be spread as fairly and equitably as possible, he said.
Senator Cormann was speaking after cabinet signed off on the government's first budget, which will be revealed next Tuesday.
"In the budget we will be delivering the lowest possible taxes given the challenge that we are facing," he said.
The government is looking at lifting the top marginal tax rate of 45 per cent to 47 per cent, and possibly lowering the starting point to incomes over $150,000.
For someone earning $200,000 that means paying $20 more tax each week.
Senator Cormann dismissed suggestions a deficit tax would be the prime minister's "Julia Gillard moment", a reference to her decision to introduce a carbon tax despite telling voters otherwise.
Tony Abbott promised not to introduce any new taxes if the coalition won government in last year's election.
"We're not doing any of this for fun, we're not doing this because it gives us any pleasure," Senator Cormann said.
Liberal MPs Teresa Gambaro and Cory Bernardi have called on the government to dump any tax hike.
Senator Cormann said the cabinet was listening "very carefully" to coalition colleagues but asked them to trust the decision makers.
Senator Cormann dismissed suggestions a deficit tax would be the prime minister's "Julia Gillard moment", a reference to her decision to introduce a carbon tax despite telling voters otherwise.
Tony Abbott promised not to introduce any new taxes if the coalition won government in last year's election.
"We're not doing any of this for fun, we're not doing this because it gives us any pleasure," Senator Cormann said.
Liberal MPs Teresa Gambaro and Cory Bernardi have called on the government to dump any tax hike.
Senator Cormann said the cabinet was listening "very carefully" to coalition colleagues but asked them to trust the decision makers.
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