Budget update to be released shortly: PM

The federal government will release its mid-year budget update at 1.30pm (AEDT) as a hostage drama continues in Sydney.

Prime Minister Tony Abbott says the ordinary business of government must go on.

"That's why Treasurer (Joe) Hockey and Finance Minister Mathias Cormann will shortly release the MYEFO as planned," he told reporters in Canberra.

The mid-year economic and fiscal outlook was due to be released at 12.30pm but was postponed until 1.30pm.