Treasurer Jim Chalmers has pledged to make spending restraint a key feature of the federal budget as the government flags major cost pressures.
Responsible economic management and spending restraint will be defining features of the May 12 budget and "crucial in the context of important and unavoidable spending pressures", Dr Chalmers said.
"We've made a lot of progress together but there's more work to do and that's why sensible savings and spending restraint are a central focus of our economic plan," he said in a statement.
Treasury figures released on Friday night highlighted more than $60 billion in spending pressures in the coming years, including $25 billion for the hospitals funding deal with the states and $14 billion worth of defence investments.
Other significant pressures include more than $6 billion in new and amended Pharmaceutical Benefits Scheme listings, $4.4 billion in extra disability support payments for pensioners and $3.2 billion in additional Jobseeker income support.
Some of the pressures are due to indexation caused by higher inflation, while an elevated exchange rate is undermining previously forecast revenue upgrades.
The government remained focused on "spending responsibly on the services and support Australians need, while still managing the budget carefully", Finance Minister Katy Gallagher said.
"That means investing in hospitals and strengthening our national security, and ensuring we make room in the budget for additional spending in response to natural disasters and unavoidable infrastructure cost pressures," Senator Gallagher said.
The government has promised the budget, under strain from higher inflation and rising borrowing costs on government debt, will focus on intergenerational equity.
But it has downplayed expectations of a tax windfall from possible changes to negative gearing and capital gains tax (CGT).
The proposals, designed to boost home ownership, come amid warnings from Prime Minister Anthony Albanese that younger Australians believe the property system is stacked against them.
