Prime Minister Julia Gillard says it's not the amount of government spending that is putting pressure on the budget, but the lack of tax money coming in.
Treasurer Wayne Swan will hand down his sixth budget next Tuesday, which is widely expected to show a $10 billion to $20 billion deficit in 2012/13 and a similar shortfall for the next financial year.
In last October's mid-year budget review, surpluses were forecast for both financial years.
"It's not about expenditure, it's about less tax money coming in," Ms Gillard told ABC radio in Brisbane.She said there was an overhang from the global financial crisis and weak global growth.
"And we have got a hugely strong Australian dollar putting a lot of pressure on parts of the economy. Businesses are making less profit, so paying less tax," she said.
Ms Gillard said a high dollar was not only weighing on exporters, it was also constraining the profits of businesses who were competing against cheap imports.
"It all adds up to less company profitability," she said.
She said any government now would be dealing with those circumstances.
"It's not about Labor governments, Liberal governments, what have you. Any government would be dealing with those circumstances," she said.
"What you can control is how you respond, and we are going to respond by putting a priority on jobs and growth."