The talks followed a harsh political reaction to suggestions from senior ministers about possible tax increases or cuts to university research spending if budget savings remained unlegislated.

The otherwise routine cabinet meeting came as even some of the nation's conservative commentators urged the government to regain the initiative, amid confusion over the language being used by senior ministers to describe the budget impasse.

With the first-year anniversary of its election looming on September 7, Coalition ministers met in what some referred to a "war cabinet" - a reflection on the government's low popularity and the stiff resistance its budget has met in the Senate.

Labor continued to offer no way forward for the government, with Opposition Leader Bill Shorten telling his MPs to hold the line.

"I would assess that we have fought well in what's been 100 days since the budget – but the fight is not over and really, we've only just begun to fight and that's what Australians expect of us," he said.

Mr Shorten pilloried the government declaring "our meeting here is about fairness, the other meeting down the corridor is about tactics".

But government sources played down the significance of the cabinet talks, claiming that strategic discussions in cabinet took place regularly and that detailed negotiations over individual initiatives remained the province of senior ministers.

Government hopes of more productive talks with the Senate crossbench appeared no closer, however, with key figures such as Palmer United Party Senate leader, Glenn Lazarus branding talk of higher taxes, if cuts cannot be approved, as "political suicide" for Tony Abbott.

That followed a weekend warning from Finance Minister Mathias Cormann that revenue would have to be increased if spending could not be cut.

Another crossbencher crucial to that outcome, South Australia's independent, Nick Xenophon, characterised those comments as "incredibly reckless and irresponsible", calling on the government to instead have the courage to address tax concessions on superannuation if it was genuine about its threat.

Labor labelled the Cormann warning tantamount to "extortion".

Senator Cormann said on Sunday the "the only alternative to balance the books is to increase taxes" and Education Minister Christopher Pyne said the government would have to examine the option of cutting research funding if Parliament rejects his proposal to deregulate the university sector.

Senator Lazarus said on Monday that the tactic would sound a death knell for the Coalition if followed through.

"I think it would be political suicide for the Abbott government if they did try and introduce more taxes to the Australian public, I can't see that happening," he told Fairfax Radio in Brisbane.

He said PUP would reject measures such as the proposed $7 fee for doctors' visits because they unfairly hit the poor.

Mr Shorten said again it was time for the government to dump its budget.

"We've seen in recent days the government move from insulting the Australian  people, telling them they just don't understand the unfair budget when in fact they do," Mr Shorten told reporters.

"The government's moved from insulting the people of Australia to threatening the people of Australia."

Agriculture Minister Barnaby Joyce said on Monday that he "fully understands" voters' concerns but likened the budgetary situation to a "financial melanoma", which "will kill you" if left unaddressed.

"In five, 10, 15 years' time, the chickens will come home to roost. We will be closing down hospitals, we won't have an ABC, we won't be able to defend ourselves because we will have run out of money," he said.