Prime Minister Julia Gillard and Treasurer Wayne Swan have been forced onto the back foot days out from the federal budget over expected cuts to welfare payments and defence.

Mr Swan is finalising the 2012/13 budget, which is set to deliver Labor's first surplus since 1989/90 on the back of spending cuts, axed tax breaks, welfare changes and the shedding of public sector jobs.

It's been revealed the budget to be announced on Tuesday will include cuts to parenting allowances and welfare payments for people travelling overseas.

About $700 million will be saved under a move to transfer single parents to the Newstart allowance when their youngest child turns eight.

For partnered parents, income support will end when their youngest child turns six.

As well, welfare recipients will lose benefits if they travel overseas for more than six weeks.

The National Welfare Rights Network estimated a person in receipt of Parenting Payment Single would lose about $59-a-week.

"We estimate such a move would force a further 100,000 single parents of children from disadvantaged and low-income families onto the lower paying Newstart Allowance," network president Maree O'Halloran said.

Ms Gillard said parents could be assured the budget would be fair.

"What I can say generally about Tuesday night's budget is it will be a Labor budget, driven by Labor values and that means we will be protecting frontline services and looking after those Australians who need our support the most," Ms Gillard told reporters in Melbourne.

Mr Swan said the government wanted to place more people in training and work and make it easier to get childcare.

"We are a Labor government and first and foremost our concerns are always for low and middle-income earners," he told reporters in Canberra.

Mr Swan said a tripling of the tax-free earnings threshold would also help the poor.

Opposition families spokesman Kevin Andrews said while it was appropriate to shift people from welfare to work, there was a danger the measures affecting single parents amounted to a "cash grab".

"If this is a just a cash grab, and there's no assistance provided for people who are going to lose up to $250-a-fortnight, then that's going to be very difficult for a lot of people," Mr Andrews told Sky News.

Australian Greens senator Rachel Siewert, whose party's support will be needed to get the budget through parliament, questioned the rationale behind stopping support payments for single parents once their youngest child turns eight.

Meanwhile, a forecast $4 billion cut to defence spending over the next four years has also come under fire.

Opposition defence spokesman David Johnston said Labor was "simply hoping and praying" there will be no major security crisis in Australia because the defence force would not be properly-funded.

Ms Gillard said the funding cuts would not impact on defence force numbers and the level of support for troops in Afghanistan, East Timor and the Solomons.

"When we look at major capability acquisitions for the defence force, there's no point allocating in the budget money defence can't spend," she said.

Defence Materiel Minister Jason Clare said shadow treasurer Joe Hockey was the "grim reaper of the Australian defence industry" following his suggestion that 12 new submarines could be built overseas to save money.

Mr Clare said the project would mean work for hundreds of Australian companies and thousands of local workers.

The government has committed $214 million in the budget towards a series of studies on the design of the new vessels.