As Prime Minister Julia Gillard challenged Opposition leader Tony Abbott to pass the budget or propose alternative savings, her Treasurer defended his $2 billion welfare assault.
Under the move, the cut-off thresholds for family payments, paid parental leave and the baby bonus will be frozen for four years, pushing families off benefits at the upper end of the income spectrum.
“There is a pause with the indexation of the top threshold and about 40,000 families would be affected by that,” Treasurer Wayne Swan said.
“Certainly over time that number would increase because the pause runs for some years, that’s the case.”
Mr Swan said the government wanted to target payments to families on a “modest income”.
Mr Abbott has signalled he may oppose the welfare cuts, saying they are a form of “class war” that hammer everyday households.