The treasurer will trim spending in the upcoming budget amid stubbornly high inflation, but small businesses and struggling Australian households can expect to be front and centre of cost-of-living relief.
Jim Chalmers says the government's support package will help take the sting out of spiking energy prices, with $1.5 billion in electricity bill assistance to form the centrepiece of the budget.
"We have indicated we will be trimming spending further in the May budget, but that's so we can make room to fund the things we value," the treasurer said on Tuesday, pointing to defence and health as areas requiring increased spending.
"There will be assistance for people with cost-of-living pressures and that will be a centrepiece of the May budget."
Dr Chalmers said the budget would also focus on building resilience against international shocks as the global economy faced its slowest growth rate in three decades.
"The global situation has become a bit more complex and a bit more uncertain," he told Nine's Today program.
"So what we need to do is work through all those pressures in a methodical way, make sure the budget is as responsible and sustainable as it can be."
Dr Chalmers said he was "confident but not complacent" that Australia could avoid a recession due to its low unemployment, increasing wage growth and high commodity prices providing a buffer.
The treasurer is due to head to Washington for key talks with world counterparts, with global financial uncertainty set to dominate discussions.
Dr Chalmers will take part in the G20 finance ministers' talks in the US as well as IMF and World Bank meetings and central bank governors' meetings during the three-day trip.
He will also be joined at the events by Reserve Bank governor Philip Lowe and Treasury secretary Steven Kennedy.
Dr Chalmers said the talks with financial heads would be critical ahead of next month's federal budget.
"There could not be a more important time to take the temperature of the global economy, as we carefully calibrate the settings of the May budget," he said.
Dr Chalmers will meet US Treasury secretary Janet Yellen, UK Chancellor of the Exchequer Jeremy Hunt and Ukrainian Finance Minister Sergii Marchenko.
It's expected high interest rates, growing inflation and economic challenges posed by the ongoing invasion of Ukraine will dominate the talks.
The treasurer will hand down his second budget on May 9.
© AAP 2023