Federal budget: $18b found in Labor savings audit, money to be reprioritised

It means almost $40 billion has been found from the Finance Minister's ongoing savings audit which found nearly $22 billion in the October budget.

The highlighting of government savings, and where it will go, comes a day out from the Treasurer's delivery of the budget which will have a cost-of-living centrepiece worth $14.6 billion over four years comprising power bill relief, energy efficiency investment and welfare changes tempered by inflation challenges. There will also be "modest, but meaningful tax changes" such as the $2.4 billion increase to the Petroleum Resources Rent Tax.

Dr Chalmers is flagging a big improvement in the budget over the past six months and both he and the Finance Minister have not denied speculation that a surplus will be delivered on Tuesday night. They have been stressing the structural budget pressures which are intensifying such as aged care, the NDIS, defence and health.

"It has been a challenging environment to land this budget," Senator Gallagher told The Canberra Times.

"And I think people will see when it's landed it's the culmination of probably hundreds, if not thousands, of individual decisions that try to kind of find the balance that we need to find which is doing what we can on cost of living."

The $17.8 billion dollars in new savings includes the already announced $7.8 billion in reprioritisations from within the Defence to deal with the "missile age" and regional threats.

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In the first Labor budget, 90 per cent of savings were redirected to other priorities. In the second, Senator Gallagher said the strategy is to "return upside as much of the upside as we can to budget repair."

She said overall just over $7 billion has had to be found for legacy terminating "booby trapped" programs left by the Coalition for the next financial year, such as for MyGov, the eSafety Commissioner, the public dental program, the national collecting institutions and Questacon.

"Questacon basically was saying we're not going to be able to open because we can't keep children safe. Okay," the ACT senator said. "So that's been a real problem."

"That's on top of the $4 billion we did in October. So that's $11 billion worth of essentially recurrent funding that wasn't accounted for in the budget books."

Defence Minister Richard Marles has already stressed that the Defence money, from within the Defence Integrated Investment Program, would be reinvested within Defence. A total of 21 projects are to be rescoped, six delayed and another six cancelled.

The Finance Minister said the broader savings and reprioritisations that will be detailed on Tuesday have been identified across government agencies and will go towards budget repair.

"Labor is being upfront with the Australian people about the true state of the books and about the decisions we are making to support those in need and grow our economy," Senator Gallagher said.