Expect tough love on May 13: Hockey

Australians should expect a serve of tough love when the Abbott government hands down its first budget, Joe Hockey has warned.

However, in a speech delivered weeks out from the May budget, the treasurer has also promised big investments in infrastructure that will help spur on the nation's economy.

"All Australians must help us to do the heavy lifting," Mr Hockey said in an address hosted by the Spectator Magazine.

He singled out the pharmaceutical benefits scheme and aged care as areas where spending was becoming increasingly unsustainable, adding that a greater reliance on means testing and co-payments could be on the way.

"The volume of demand for these programs is outstripping the capacity of taxpayers to fund them," Mr Hockey said.

"The $40 billion we spend on the aged pension each year is more than we spend on the defence of our country, on hospitals, or on schools. It is our single biggest spending program."

But he said he was wary of cutting too much, too soon.

"We have to invest in the infrastructure that is going to drive the non-mining side of the economy," he said.

"If we move too quickly, if we cut to shreds the budget in the next two years, we have the capacity to drive (ourselves) into a much lower rate of economic growth."

And after much speculation about an increase in the pension age to 70, Mr Hockey said the nation needed to have a conversation about a career "restart" for workers aged in their 50s and 60s, which would allow those in physically taxing jobs to stay in the workforce longer.

"We're all going to have to have the opportunity to work for more of our lives," he said.

His address came after Prime Minister Tony Abbott again warned of a big repair job on May 13.

"You have got to fix the budget if you are going to fix the economy," he told reporters in Canberra on Wednesday.

The budget would be about long-term structural reform after a six-year "reform holiday" under Labor, he said.

The government's keenly awaited commission of audit will be released next Thursday, a report that contains 86 recommendations.

Mr Hockey said that while the report will help him prepare his budget, he will not be automatically accepting all the commission's ideas.

Opposition Leader Bill Shorten described the audit commission report as an alibi for the prime minister's broken promises.

"The Abbott government wants to cut the pension at the same time as giving $75,000 to millionaires to have a baby. Pensioners will see through their weasel words," he told AAP.

The CPI rose 0.6 per cent in the March quarter, lower than the 0.8 per cent expected by economists, after solid increases in the previous two quarters.

However, annual inflation still rose to 2.9 per cent from 2.7 per cent, its highest level in just over two years.

More importantly for the RBA's cash rate deliberations, the underlying measures of inflation rose modestly.

Opposition finance spokesman Tony Burke told AAP the figures further reinforce the RBA's "neutral bias" for monetary policy.