Hockey not panicked by revenue fall

Joe Hockey is not going to be panicked into further budget cuts despite a likely decline in the nation's income.

The treasurer says the government can control budget spending, but it can't control income.

Export revenue has been hit by a 30 per cent drop in iron ore prices since the May budget while wages growth remains at its slowest rate in at least 17 years.

Mr Hockey is due to hand down his mid-year budget review in December.

"We are not going to do anything in the mid-year economic update that harms the Australian economy," he told ABC radio on Thursday.

"It's not about panic, it's not about responding with a whole range of further cuts."

It was about ensuring that problems were recognised and the next budget crafted appropriate solutions.

The economy needed to diversify its income base, away from a reliance on resources and into areas such as services exports.

That is why free trade agreements with South Korea, Japan and hopefully China were so important, Mr Hockey said.

"The best way to grow your business is to expand your market," he said.