Spending cuts must be strictly observed if the federal government really intends to return to budget surplus by 2013, that according to opposition leader Tony Abbott.

First thing to go, Mr Abbott insisted, should be the Labor-led government's pledge of giving out cash incentives of up to $2000 in return for the turn-in of old model vehicles perceived as energy-inefficient.

The Coalition call came amidst Prime Minister Julia Gillard's assertions that despite the surging Australian dollar, which has reached parity against the US dollar last week, the federal budget would register a surplus on 2013.

The Federal Treasury assured that the target budget surplus is not a remote possibility as it is set to publish its updated budget projections on Tuesday that contain the government's mid-year economic and fiscal outlook.

Mr Abbott told ABC on Monday that the federal government needs to adopt stringent measures, with budget cuts foremost to its list, if it is indeed serious on its pronouncement that a budget surplus is in the offing come three years from now.

While he is relentless in calling for tough decisions from Ms Gillard's government, the opposition leader clarified that he would be surprised if that should happen now as he stressed that the present government has managed to convince the public that it is incapable of dispensing solid governance.

In order to set aside more money, Mr Abbott suggested that the government can do away with its cash for clunkers policy, which he said was a mere 'thought bubble' and ditching it would amount to more money for federal coffers.

The idea was thought of to encourage the patronage of more fuel-efficient car models and was clearly patterned after the US government stimulus plan but its implementation sparked fears of budget depletion in light of recent economic indicators.

The Coalition maintained that a rising Australian dollar is poised to offset a considerable chunk of revenue projections mostly from the government's mining tax and eventually lead to a fall short on targeted budget levels.

Yet despite the Aussie dollar achieving parity, the federal government was adamant that the budget deficit would be resolved by 2013 as Ms Gillard declared over the weekend that she remains firm on her earlier commitment that "the budget will be back in the black," as shown on her Nine Network interview.