Tuesday's federal budget will be a "good Labor" one, protecting struggling people as much as possible from the worst of the spending cuts, government MPs have been told.

Treasurer Wayne Swan is expected to announce a massive surplus of between $17 billion and $22 billion, fuelled by the minerals boom and bolstered by harsh cuts to government programs, when he hands down Labor's first budget in 13 years.

But the budget is also expected to show a major collapse in the government's tax revenue growth - down by as much as $8 billion - because of the global economic downturn and the credit squeeze prompted by the US sub-prime meltdown.

The budget would honour Labor's election promises while slashing spending to fight inflation, Prime Minister Kevin Rudd told caucus on Monday.

"It is a good Labor budget that is consistent with meeting the commitments that we made prior to the election last year," Mr Rudd is understood to have told MPs.

Mr Swan did not comment directly on the revenue slump.

But he warned that deep cuts would have to be made to battle rising inflation.

"We're not going to be as lucky as the previous government when it came to revenue upgrades so we can't be as lazy in terms of our response," Mr Swan told reporters.

"That's why we've had to make significant savings.

"The previous government just relied upon endless increases in taxation revenue to fund increasing spending. We haven't got that luxury.

"We've got to go out and work hard to find our savings to put downward pressure on prices and downward pressure on interest rates."

A poll released on Monday showed 90 per cent of those surveyed believed Australia had an inflation problem and of those three in five rated it as a major problem.

The Essential Research poll of just over 1,000 people found that voters still regarded the coalition - now in opposition - as better economic managers, but only just.

They also rated Labor as significantly better at handling the economy in a way that helped ordinary working people.

But opposition treasury spokesman Malcolm Turnbull said Mr Swan had scared people by exaggerating the inflation problem.

"When you're the treasurer, people assume you are acting on advice. They take you very seriously, no matter who you are, whether you've got L-plates or not," Mr Turnbull told Macquarie Radio.

"And he's added to our problems by the way he's been talking.

"Inflation is a big challenge, we know that. But he's talked it up, said it's out of control when it isn't and undermined Australians' confidence."

Mr Swan told caucus he was proud of the budget.

"It will be a tough budget but we have tried hard to insulate working people who are under pressure from the cuts that will be made," he is understood to have told the meeting.

Mr Rudd told MPs the budget was aimed at building a strong economy through responsible economic management and responding to the inflation legacy left by the former Howard government.

"The budget will deliver for working families," he said.

"It will also show that we are investors in the long-term future on education, hospitals and infrastructure and will also be providing for Australia's long-term defence and security needs."

Mr Swan will release the budget at 7.30pm (AEST) on Tuesday.