Prime Minister Tony Abbott has called his government the "best friend workers of Australia have ever had" in a speech defending his "tough budget" including policies affecting young and unemployed Australians.

According to reports, Mr Abbott has brushed off suggestions that the work-for-the-dole program was "demeaning." Speaking in an event for the Committee for Economic Development of Australia, the prime minister criticised the Labour, Greens and Palmer United parties including welfare groups regarding his government's plan to drop income support for Australians for six months for people under age 30 if they are not "earning or learning."

Labour and Opposition leader Bill Shorten has denounced the key policy as a "single most heartless measure in this brutal budget." The policy known as Newstart may be blocked by the Senate.

Mr Abbott told his audience about the value of work in empowering people and argued there will be no compassion for Australians who "start their adult lives on employment." He said it would be considered a "disaster" for young people to be without a job.

Mr Abbott said fit and young people should be with jobs that pay wages but if not, they will be working for the dole. He recalled his days with the Howard government when he served as employment minister. Mr Abbott said he didn't see anyone "demeaned" by it and most unemployed people were "yearning to show the world what they can do."

He added that being an adult means being responsible for choices and choosing the best option in every circumstance. Mr Abbott reiterated that only after six months will young job seekers receive welfare. After that, they will be required to work 25 hours a week for the dole.

He argued that "almost everything" in the government's budget was designed to ensure more Australians will have more jobs due to lower taxes, free trade and less red tape. Mr Abbott said more government spending will boost employment in the short-term. However, he believes it will be more difficult to sustain private businesses for jobs growth in the long-term if the government keeps on spending.

Reports said the budget was meant to "make it easier for young people, for older people and women to enter the workforce." He encouraged Australians to be workers so people will be more productive.

He wants the Abbott government to be the "best friend" Australian workers have ever had. The government is facing the obstacle of getting key welfare policies through the Senate.

In response to Mr Abbott's speech, Shorten said the Newstart policy is "sentencing young people" to a life of an endless cycle of poverty. The Greens argued Mr Abbott's program was an "attack" on Australia's most vulnerable people while Clive Palmer said the government may be seeking to drive the unemployed youth to a life of crime.

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