We won't compromise on co-payment: Hockey

Treasurer Joe Hockey has all but ruled out compromise on a GP co-payment. Source: AAP

TREASURER Joe Hockey has all but ruled out compromise on a GP co-payment, as Labor finally confirmed it would not block the government's deficit levy for the rich.

A bullish Mr Hockey on Sunday said the government would be willing to negotiate with senators on the budget, but warned against outright opposition to every measure.

"If the immediate answer of everyone in the Senate is no, then I think the Australian people have a low, low tolerance for that," he told Sky News on Sunday.

Labor, the Greens and cross-benchers have said they will oppose many of the unpopular changes in Mr Hockey's first budget, including the $7 Medicare co-payment.

But Mr Hockey said he did not think the government should compromise on the payment, $5 of which will go into a new medical research future fund.

"If the independents and the Labor party want to have a medical research future fund, there has to be a co-payment," Mr Hockey said.

"You cannot have both."

Health Minister Peter Dutton also signalled an unwillingness to negotiate on the $7 co-payment.

"As people realise that this package really is about strengthening Medicare ... I think that will bring pressure to bear on the senators," he told the Ten Network.

"Some people advocated that we get rid of bulk billing altogether, but we haven't."

Labor Senate leader Penny Wong revealed her party would not stand in the way of the proposed deficit levy for those earning more than $180,000, after weeks of hinting it may support the new tax.

However, the opposition was "not for moving" on changes to pensions and Medicare, or cuts to health and education funding, she said.

Senator Wong ruled out negotiation on plans for university deregulation, which will allow them to charge higher student fees.

Labor's opposition to the Medicare co-payment was also non-negotiable, she said.

"If Tony Abbott wants to do that he's going to have to come through us in the Senate," she told ABC Television.

Prime Minister Tony Abbott has said he won't surrender his government's budget commitments to the Senate, and has hinted a double dissolution election isn't out of the question if negotiations fail.

But Greens leader Christine Milne labelled Mr Abbott untrustworthy and incapable of negotiating with the senators.

Mr Abbott was leading a "lame duck government", she said.

The prime minister said the government's tough budget was "absolutely necessary" to rein in the country's debt and deficit.

"We need to take action now or an even greater burden will fall on our kids' generation," Mr Abbott said in a brief statement.

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