Joe Hockey says three million Australians will have to pay higher taxes unless the Government slashes spending economy-wide.
Describing a return to surplus as a "moral imperative", the Treasurer said repairing the Budget would require Australians to lose spending they now "take for granted" as well as more means-testing and co-payments.
Mr Hockey indicated the Government accepted a Commission of Audit recommendation to cap annual spending growth at 1.75 per cent a year for a decade.
Foreshadowing corporate and personal welfare would be targets in the May 13 Budget, he revealed the commission's report had 86 recommendations to restore Budget sustainability.
While some, such as winding back Tony Abbott's $5.5 billion-a-year paid parental leave scheme, will be rejected, others will start almost immediately and some require "further consideration".
Mr Hockey told a function in Sydney last night the Government would be active "only where it is needed" and where the private sector could not adequately fulfil the function.
"I ask Australians not to judge this Budget on what they get or lose today," he said.
"This Budget is about our quality of life for the years ahead. The Government will continue to support the most vulnerable. It will do for people what they cannot do for themselves, but no more."
Mr Hockey said opponents of hard savings should recognise the "regressive" alternative - letting three million workers pay more tax through "bracket creep" as inflation dragged them into higher tax brackets.
He said the commission found the 15 biggest areas of spending were also the fastest growing. The age pension would cost the Budget more than defence and family tax benefits combined by 2023-24 if unchecked. Childcare and PPL would grow at 11.5 per cent and hospitals at 10.4 per cent annually over the next decade.
It appears an extra $60-$70 billion will be needed over the decade for the promise to lift defence spending to 2 per cent of GDP.
The audit recommendations will be released next Thursday.
Labor leader Bill Shorten said the audit report was an excuse for broken promises and twisted priorities, such as wanting to cut pensions while giving $75,000 to millionaires to have a baby.