Malcolm Turnbull's first studio of the year.
The Prime Minister admits further spending cuts are being considered and hasn't ruled out targeting health and welfare.
The head of Treasury John Fraser has warned urgent action is needed to reduce spending so Australia can maintain its prized triple-A credit rating.
He's argued weaker-than-expected revenue and falling commodity prices aren't an excuse to avoid making tough decisions.
Malcolm Turnbull told Neil Mitchell in his first studio interview of 2016 that savings were being considered across the board.
"Wherever we can find a means of achieving the government's objectives, whether it's social welfare or health, or in any area – administration, environment – wherever we can find a means of doing so and getting the right policy bang, for a smaller taxpayer buck, we will do so," the Prime Minister said on 3AW Mornings.
Click PLAY below to hear Malcolm Turnbull's full interview with Neil Mitchell.