Taxpayers will find the upcoming government budget update confronting, Treasurer Jim Chalmers says.

Dr Chalmers said his government had inherited the “trickiest set of economic conditions” in memory.

He is set to provide the latest debt forecast on July 28 during the first parliamentary sitting week of the new government.

“The news in that statement will be, in many ways, confronting when it comes to our expectations of inflation,” Dr Chalmers told reporters on Monday.

“When it comes to the impact of interest rate rises on growth, when it comes to what this spike in inflation means for real wages.”

But the government’s “helplessness” is not what Australians need, deputy opposition leader Sussan Ley said.

“The economy is dynamic, government is challenging,” she told Sky News on Monday.

“You respond to events as they happen and you do it in a way that gives people confidence, demonstrates your plan and actually appreciates that just telling everybody how hard it all is, is not going to cut it.”

The treasurer said it was important to find savings in the budget, with the nation’s debt being burdened by rising interest rates.

“If you think about the consequences of those rising interest rates on the budget, more than a billion dollars this year, more than $5 billion in the last year … these are not small amounts of money,” he said.

“The key task of every budget is to make sure that we are getting maximum bang for buck from taxpayers’ dollars, which are costing more and more to service because every additional dollar in the budget is a borrowed dollar.”

When asked if the fuel excise cut would be extended beyond its end date in September, the treasurer said the measure was too costly to continue.

“We’ll always try and do the right thing by people, (and) will take the economic conditions into account when the time comes,” Dr Chalmers said.

“But my expectation, and the expectation I’d encourage people to have is that we can’t afford to continue that petrol price relief forever.”

The government must make a decision on the fuel excise armed with all the information they have, Ms Ley said.

“I wish them well with it and I hope they understand all of the impacts and all of the consequences,” she said.

Dr Chalmers said the government had chosen to prioritise childcare and medicines when it hands down its budget in October.

The treasurer also said he would announce the terms of reference and panel for the review of the Reserve Bank before parliament returns next week.

Tess Ikonomou and Maeve Bannister
(Australian Associated Press)