Officials have warned Chief Minister and Treasurer Andrew Barr that continuing to run deficits will expose the ACT budget to future economic shocks and make it harder to access finance, which could hinder the territory's capacity to deliver services.

Mr Barr said he would start repairing the budget as the health and economic situation improved.

But he said now was not the time to rein in government spending, as he signalled an extension of coronavirus support measures - including commercial and residential tax relief - into 2021.

"The economy remains fragile and pulling the rug out would send the wrong signals," Mr Barr said.

"Right now we need certainty to maintain the rebounding confidence we have seen over the past few months."

Treasury's advice was included in an internal brief prepared for Mr Barr after Labor won re-election on October 17.

The ACT's budget position has been ravaged by the coronavirus pandemic, with record levels of government spending on health and economic survival measures coinciding with a sharp decline in revenue.

The budget is forecast to slide almost $910 million into the red in 2020-21, with deficits of $670 million, $455 million and $402 million projected in the following three financial years.

Debt will rise from nearly $5 billion this year to almost $8 billion in 2023-24, according to budget estimates.

The incoming minister brief prepared for Mr Barr, which has been published under freedom of information, said in the short term there was a case for the government to support the economy until the uncertainty around the "impact of COVID-19 passes" and the "ACT economy shows more consistent signs of recovery".

But officials said the current gap between spending and taxation was not "sustainable" in the medium term.

Treasury recommended that as "soon as practically possible", the government needed to "put in place a more detailed strategy to return the budget to balance and start repaying debt".

"Continuing to run deficits will reduce the government's capacity to respond to any future economic shocks and if sustained may lower the ACT's capacity to access market finance, putting at risk the government's capacity to deliver services," the internal brief stated.

Officials said in the coming weeks Treasury would present Mr Barr with advice on "approaches to constraining spending in the medium term".

Mr Barr indicated the options presented to him related to the future of various coronavirus support measures, many of which were due to expire at the end of December.

The Canberra Times understands cabinet will consider options to extend support into 2021 at a meeting on Thursday, with announcements to be made prior to Christmas.

"As we have done throughout the pandemic, we have tailored our economic response as has been required and targeted it to industries/sectors where it is most needed," Mr Barr said.

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When asked if the government had started developing a detailed plan to repair the budget, Mr Barr said it had - pointing to a high-level strategy set out in the August economic statement. Further updates would be provided in the ACT budgets to be handed down in February and August, he said.

Mr Barr agreed with Treasury's advice on the need to balance the budget and reduce debt, saying that's what he intended to do as the health and economic position improved.

But Mr Barr, who has been critical of the emphasis placed on debt and deficits as measures of economic strength, pointed to other markers which needed to be considered, such as unemployment levels, income growth, gender pay parity and rates of casualisation in the workforce.

The ACT's ability to access finance would depend on a number of factors, he said, including Reserve Bank policy, global markets and the territory's credit rating - which remains at AAA.

Mr Barr reiterated that now was the best time for government to borrow and invest given historic low interest rates.

"The ACT government is fully committed to providing the necessary funding to support our economic recovery and ensure essential health services are available," he said.