Prime Minister Tony Abbott has promised his government will continue to take big political risks to repair the budget, while conceding "we didn't achieve everything we hoped to achieve" last year.
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And he has insisted the budget will set out a "credible path back to surplus" for a return to surplus, despite a warning from Deloitte Access Economics that the federal deficit will blow out to $45.9 billion in 2014-15 and $45.3 billion in 2015-16.
In March, Mr Abbott said the federal government's second budget would be "dull" compared to last year.
A new childcare package targeted at low and middle income earners, a 1.5 per cent tax cut for small business and a jobs package to get older Australians back into the workforce have all been previewed ahead of the budget, which will be handed down on May 12.
The government also claimed on Monday a $500 million saving in the 2015-16 budget from its success in stopping the flow of asylum seeker boats to Australia.
Mr Abbott would not comment on the specific budget numbers, but indicated an increased budget deficit was likely.
"Obviously there are some headwinds overseas. We have got slower growth than was expected in some of our trading partners. We've got a much lower iron ore price than was expected even at MYEFO [Mid-Year Economic and Fiscal Outlook],"he said.
In addition, weaker wages growth is also expected to deliver lower than expected income tax receipts and a further hit to the bottom line.
"What this year's budget will demonstrate is a credible path back to surplus, a credible path back to a situation where this country is living within its means because that's what all countries and all governments ultimately have to do," he said.
The Prime Minister said his government had made important progress last year's budget because "we took some political risks, some very big political risks last year".
As a result, the government had "at least halved Labor's debt and deficit in the years to come".
"We wouldn't have taken the political pain that we have if we weren't serious about budget repair," he said.
"This government has taken big political risks for budget repair. We will continue to take big significant political risks for budget repair. But, in the end, what I believe people will conclude about this budget is that it is measured, responsible and fair."
In a speech on Monday, Opposition Leader Bill Shorten said the government could not afford a "dull" budget and that further fiscal reform was needed.
"What I believe is that there's a transition underway from mining to non-mining, we see the rise of Asia, we see the ongoing impact of the digital revolution. This government needs to have a plan for the future, not just a nip and a tuck to try and preserve Joe Hockey and Tony Abbott's jobs," he told ABC radio.
"We've supported some of the proposals that they've put forward in their last budget, but more importantly than that we've offered up processes to make sure that multinationals pay their fair share in the Australian taxation system."
