TORONTO - Ontario's Liberal government cozied up tighter with the NDP Thursday while lashing out at the Progressive Conservatives for vowing to defeat the budget without offering any suggestions to improve the fiscal plan.

"I must say I'm pleased to be involved in what I think is a healthy, respectful dialogue with the NDP," Premier Dalton McGuinty told reporters at a hastily called media availability.

"The problem with the PCs is they abandoned an opportunity for them to lend further shape to the budget ... and I just think in our business you've got to try."

McGuinty's comments followed a second set of demands from NDP Leader Andrea Horwath in exchange for supporting the Liberals' budget and avoiding a defeat of the minority government.

The government should cap compensation packages for executives at hospitals, universities, power utilities and other publicly funded institutions at $418,000, or twice the premier's salary, said Horwath.

"In tough times, our priority should be improving service at our hospitals, not improving paycheques of the people who run them," she said.

Horwath also demanded a $100-million fund to improve local health care services, saying the Liberals' budget will lead to some hospital closures.

The NDP's proposal for a higher income tax on all executives paid more than $500,000 a year would bring in $570 million, said Horwath, enough to pay for the new hospital fund and the cost of removing the provincial portion of the HST from home-heating bills.

The Liberals dispute the NDP's numbers, saying the tax on the super rich would bring in about $440 million, with McGuinty again warning he doesn't want to hike taxes to trim the $15.2-billion deficit.

"We've got to keep an eye on new spending," said McGuinty.

"I throw that caution out there for my colleagues in the NDP."

The NDP feel it's time the Liberals got over their aversion to taxing the people who can most afford to pay more, said Horwath.

"I guess by putting that forward we don't accept that one premise," she said.

McGuinty repeated his earlier position that the Liberals want to see all of the NDP's demands -- Horwath promised more next week -- before he'll rule any of them in or out.

"Rather than respond to them on an individual basis, I'm looking forward to receiving the package in its entirety so we can give that I think a more thoughtful consideration," he said.

Horwath said "the premier will have all of our ideas soon enough," and defended her decision not to reveal them all at once.

"We think it's important to make sure that Ontarians, and the Liberals, have a chance to reflect on what we're bringing forward, so we're phasing those announcements just a little bit," she said.

The NDP leader rejected suggestions she was trying to squeeze as much publicity as possible out of the Liberals' need for some votes from the opposition benches to pass their budget.

"If it was only a political game-playing exercise we would have asked for the moon and known that we wouldn't have got it," said Horwath.

"I'm not into political games. I'm into making sure that we're doing everything we can to make this minority government work, by working with the Liberals and putting forward thoughtful, achievable suggestions for changes to the budget."

The Tories promised to reject the budget as soon as it was introduced last week, which means the Liberals need at least two NDP votes for it to pass or the minority government will fall, triggering another election campaign.

"One of the lowest priorities on the minds of Ontarians this weekend would be to have an election at some point before the summer," said McGuinty.