Treasurer Joe Hockey says changes to Medicare and pensions are needed because a future generation could live to the age of 150.

The comment came as a new survey showed a fall in business confidence, partly blamed on the federal government’s inability to deliver its economic agenda and budget.

And Labor noted that exactly 500 days on from being elected, Prime Minister Tony Abbott had delivered a GP tax, cuts to pensions and government dysfunction.

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Making his first public comments after a summer break, Mr Hockey said budget changes to pensions and health care were essential.

“It is kind of remarkable that somewhere in the world today it is highly probable a child has been born who will live to be 150,” he told Fairfax Radio on Monday.

“How do we ensure that we have good quality of life the whole way through? This is the conversation we are going to be having with the Australian people over the next few months.”

Mr Hockey dismissed reports of a rift in cabinet with Mr Abbott over the latest Medicare policy changes as “gossip”.

“Sometimes it is better to reverse a position than to continue with a position that is going to have bad ramifications,” he said.

Opposition Leader Bill Shorten said Mr Abbott needed to visit Queensland, which goes to the polls on January 31, and explain why he wants people to pay more to see a doctor.

Mr Shorten called Mr Hockey’s comment about people living to 150 a “brain snap”.

Business confidence was down because the government was “losing the plot”, the Labor leader said.

Asked about division in the government, Australian Chamber of Commerce and Industry chief Kate Carnell said business needed a government that had a clear agenda and could prosecute that agenda.

The ACCI December quarter confidence survey showed a fall in most indicators of business trading conditions.

The figure for business profitability fell to its lowest point in the survey’s 23-year history.

Expectations of the Australian economy fell into negative territory in the December quarter, showing businesses expect conditions to deteriorate over the next three months.

Ms Carnell described the business climate as “terrible”.

“We need the government, and the parliament to act to restore business confidence by fixing the budget and undertaking productivity-enhancing structural reforms,” she said.

Small Business Minister Bruce Billson told AAP the report showed the need for budget repair.

“I’m cautiously optimistic about the year ahead,” he said, pointing to a strong jobs growth rate, free trade deals, a rise in business registrations and solid job advertisement rates.

He said the most recent changes to Medicare reflected the reality of navigating reforms through a minority-held Senate.

“Budget repair is essential and a fundamental foundation for economic growth,” he said.

Mr Hockey said he hoped no other policies would be dumped early this year.

“You have to proceed with difficult decisions … but it’s got to be fair,” he said.

-AAP