Australia's federal opposition leader, Brendan Nelson, will be looking to prove his leadership credentials on Thursday night when he delivers his reply to the federal budget.

The opposition is stressing it is not presenting an alternative budget, but Mr Nelson's reply speech tonight is his first major opportunity to turn the tables on the government.

It will also give Dr Nelson the chance to clearly state the coalition's policy on several unanswered questions, like the appropriate level for means testing of government benefits.

The opposition leader says he has always accepted there is a need to "trim the sails" in terms of government spending, but he has been highly critical that 134,000 people are likely to lose their jobs as a result of the government's budget cuts.

What he has not yet spelled out is how the government should stop those people losing their jobs, without adding to inflation.

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