Treasurer Jim Chalmers says the financial storm hitting the UK is a "cautionary tale" for the Albanese government's first budget later this month.
Dr Chalmers said no "responsible government could ignore" the deterioration in the global economy, pointing to the UK where Britain's central bank was forced to intervene and buy bonds to avoid a crisis.
"I do consider it a bit of a cautionary tale," he told Sky News on Sunday.
"If you don't get the cost of living relief right, if you don't rebuild those fiscal buffers against global turbulence, if you don't get those things right there are costs and consequences."
The treasurer said the October 25 budget will be about "difficult decisions" while providing cost-of-living relief to struggling households without adding to inflation.
"We are prepared to take the right and responsible path ... when it comes to making sure that our spending is affordable and sustainable," he said.
"So that we can rebuild those buffers against that global turbulence which has gotten worse even in the course of the last month or two."
Dr Chalmers said the nation's finances would see a contribution from exports, but not enough to offset "structural issues".
It comes after he revealed the last budget had improved by almost $50 billion.
Dr Chalmers also warned inflation in Australia will get worse before it gets better.
"Inflation numbers with a six in front of them or even a seven are incredibly concerning," he said.
Dr Chalmers said the government hadn't changed its stance on the stage three tax cuts, but said the nation could expect to see the implementation of Labor's multinational tax policy in this budget.
