A budget mini-update includes more than $16 billion in automatic spending increases and $8.8 billion in "unavoidable spending" such as extending programs, but $14.6 billion in savings and reallocated spending will limit the damage to the bottom line.
Treasurer Jim Chalmers told Australians the focus was on rolling out cost-of-living measures already announced, including tax cuts and energy bill relief.
But the number for decisions taken but not yet announced, which is code for new policies, "won't stand out" according to Dr Chalmers.
"We keep that constant review from budget to budget and when we can afford to do more to help people doing it tough, we generally try to make room for that," he told reporters in Canberra on Tuesday.
"It won't be particularly unusual compared to earlier budgets and updates when it comes to cost-of-living relief, the focus is on rolling out the very substantial cost-of-living health that we've already budgeted for."
Wednesday's mid-year economic and fiscal outlook is set to unveil a budget in deficit predicted to be $33 billion by Deloitte Access Economics and a sea of red into the future.
Blowouts have been blamed on infrastructure, extending funding to programs where money hadn't been allocated and increases to the National Disability Insurance Scheme.
Weakness in the Chinese economy is also set to smash Australian mineral exports by more than $100 billion and result in an $8.5 billion reduction in company tax receipts over four years.
Savings will come from aged care reform, reallocations within defence and a renegotiated vaccine supply agreement.
The focus is on rolling out already substantial cost of living relief, Treasurer Jim Chalmers says. (Lukas Coch/AAP PHOTOS)
Consumer sentiment dipped marginally in December after rising strongly from the middle of the year, the Westpac Consumer Sentiment Index found.
Dr Chalmers put the dip down to Black Friday sales at the end of November, which increased the figure's volatility.
"Before Black Friday, there are a lot of people saying they've got the confidence to buy a major household item or something like that, and then afterwards, you see the big correction," he said.
The long-term trend had confidence coming back, although "it's still not gangbusters".
Household budgets continue to be under pressure from a higher cost of living and interest rates, CreditorWatch's chief economist Ivan Colhoun said.
"Slower inflation does not mean lower prices," he said.
Shadow treasurer Angus Taylor says this is the highest level of government spending we have seen. (Mick Tsikas/AAP PHOTOS)
Shadow treasurer Angus Taylor said the government's "reckless spending" was resulting in budget red ink as far as the eye can see and contributing to high inflation and interest rates.
"This is the highest level of government spending we've seen," he said
The coalition was opposed to more than $100 billion in spending, he said.
Dr Chalmers hit back, questioning where they could make cuts with a lot of the increased spending automatic adjustments to indexation and funding increases, in response to increased demand for government payments.
This occurs regardless of government decisions.
It includes $3.6 billion in extra payments through the aged pension, $3.1 billion in childcare subsidy payments, $2.6 billion in schools funding, $2.3 billion in health benefits and $1.8 billion in additional payments for veterans.
"So every single time that Angus Taylor said that this is wasteful spending, he needs to be asked, how much will he cut from Medicare and medicines and pension indexation?" the treasurer said.
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