The Nationals are refusing to back a proposed change to the luxury car tax hike that will exempt farmers.
Family First senator Steve Fielding, one of seven balance of power senators whose support the government needs to implement the increase, wants protection for those working in rural and tourism industries.
The government wants to increase the luxury car tax - from 25 per cent to 33 per cent - on vehicles worth more than $57,180.
Nationals leader Warren Truss described Senator Fielding's proposed changes as an improvement.
"But we're still opposed to the tax in principle," he told reporters in Canberra.
"We're opposed to this surcharge on luxury cars in the first place."
A Greens proposal, said to have been accepted by the Rudd government, will exempt 25 makes of fuel efficient cars.
That would hurt rural people who relied on four-wheel drive vehicles and large families who needed big cars, Mr Truss said.
"This kind of a deal will sell out the rural community."
Mr Truss said all cars should be fuel-efficient, but using the luxury car tax to encourage fuel efficiency was a blunt instrument.
The Senate is scheduled to resume debate on the $555 million budget measure today.
