We need sensible savings for tax cuts: PM

Prime Minister Tony Abbott says his government has a good track record in reducing spending so taxes can be cut further.

His treasurer Joe Hockey made the case to cut personal income tax to combat bracket creep in a speech in Sydney on Monday, but was vague on how that would be funded.

"This government has a good record when it comes to spending ... we're always looking for sensible savings and we're always looking to cut taxes further," Mr Abbott told reporters on Mer Island in the Torres Strait.