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Finance Minister Simon Birmingham insists Australia's debt levels can be serviced by growing the economy.
Debt is heading towards a record $1 trillion as the Morrison government seeks to deal with the economic, social and health impacts of the COVID-19 pandemic.
Ahead of the budget due to be delivered on May 11, Senator Birmingham said projections by key advisers show the debt is manageable.
"Those future projections show very much that at the rate at which we can grow the economy should enable us to continue to sustainably service the debts that we have," he told Sky News on Friday.
Record low interest rates made it easier to handle than in the past.
Shadow treasurer Jim Chalmers said debt had already hit record levels before the pandemic struck.
Senator Birmingham said the budget would detail how the government will respond to the aged care royal commission, beyond measures already announced.
"In this budget, we will not only be dealing with all of the uncertainties of COVID all of our focus on economic recovery and jobs growth, but also on the delivery of those essential services like aged care."
Treasurer Josh Frydenberg this week announced a key fiscal strategy change, saying he wanted to see the jobless rate below five per cent before undertaking the budget repair process.
Last year, in the depths of the pandemic and after splashing out billions of dollar to protect the economy, the treasurer said budget repair would not commence until the jobless rate was "comfortably below six per cent".
The unemployment rate has since fallen to 5.6 per cent.
Dr Chalmers said it was right that the government dropped its austerity push and focused on jobs, but job insecurity and low wages growth needed addressing.
"What we need to see is a good economic outcome," Dr Chalmers said.
"The economy is recovering, but it's patchy, and uneven.
"There's still two million Australians who can't find a job or enough work. There are still lots of people for whom this still feels like a recession."
Mr Frydenberg announced on Friday the government would pump an extra $3.4 million into the Takeovers Panel - Australia's primary dispute resolution forum during takeover bids.
He said it was in response to the "significant growth" in takeover disputes.
As well the government will look at broadening the role the panel plays in control transactions, including potentially giving advance rulings and expanding the panel's remit to include members' schemes of arrangement.
The Australian Council of Social Service says the government should use the budget to offer $1000 each to electricity customers finding it hard to pay their bills.
The number of customers in energy debt increased 32 per cent to more than 170,000 in the 12 months to December 2020, with the average debt rising by 27 per cent to $1008, the peak welfare body says.
"People living on $44 a day have little hope of repaying a $1000 energy debt, and will struggle to afford their next energy bill," ACOSS chief executive Cassandra Goldie said.
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