Pension cuts may go with surplus budget

The federal government has signalled it may back down on plans to limit increases to the age pension, but only if its budget returns to surplus.

It has stopped short of scrapping draft laws that peg increases to inflation rather than wages, a measure expected to save $23 billion over eight years.

Government legislation has stalled in a hostile Senate and been panned by some coalition backbenchers who want Prime Minister Tony Abbott to abandon the unpopular policy.

Mr Abbott on Tuesday would not confirm whether he's heeded those calls, saying the government was prepared to look at indexation once the budget was back to a "strong" surplus.

He argued the coalition was giving pensioners a fair go anyway because they are continuing to receive a compensation payment for the carbon tax, even though the impost has been scrapped.

"By any measure, that is a good deal for the pensioners of Australia," Mr Abbott told reporters in Kalgoorlie.

The measure would see the value of the pension slump from 28 per cent of average weekly earnings today to just 16 per cent by 2055.