Joe Hockey ready to play hardball over budget

TREASURER Joe Hockey has escalated the fight over his first budget, warning the Senate he will look at ways to bypass it in the search for savings.

After the Senate blocked both the mining tax and the government's much-vaunted asset recycling program, Mr Hockey said he was prepared to attach some budget measures to appropriation bills.

He told ABC Radio on Wednesday that if the Labor Party wanted to block the budget measures, they would "have to block appropriations".

While Mr Hockey said he wanted to work with the Senate, pressure is increasing on the government to either negotiate with the crossbench or reveal a new "mini-budget".

Blocking the budget appropriations, or "supply" as it is often called, could trigger a wider fight and threaten the on-going operations of government.

His comments have confirmed the government is prepared to circumvent the Senate if it does not agree with measures including the GP co-payment and other budget cuts.

Mr Hockey also said that in opposing the budget measures two weeks ago, both Labor and The Greens had "dealt themselves out" of potential talks.

But he has said the government is prepared to negotiate with other Senate crossbenchers, despite criticism of many individual measures by most of the crossbench in recent weeks.