Hard-pressed households have been warned not to expect big handouts from the federal government when it delivers its mid-year budget update in coming weeks.
Treasurer Jim Chalmers told a banker's conference in Sydney that the mid-year economic and fiscal outlook is due to be handed down before Christmas would continue the government's "responsible approach" to its handling of the budget.
Dr Chalmers said this would include banking most of any revenue upgrades and restraining spending while providing for "unavoidable spending", making necessary investments and "help[ing] people doing it tough".
There have been mounting calls for the government to increase its support for households struggling under pressure from high inflation and interest rates, surging housing costs and spikes in the cost of essentials such as fuel.
But the government has been wary of providing assistance that could exacerbate the nation's inflation problem by fuelling spending.
Most of its support has been aimed at reducing expenditure, such as capping energy costs, subsidising childcare and increasing rent assistance.
The treasurer said this "carefully calibrated" assistance was helping to ease inflation, shaving 0.5 of a percentage point off the consumer price index according to the Australian Bureau of Statistics.
But stubborn inflation and the latest interest rate hike have heightened the pressure for it to do more.
Shadow treasurer Angus Taylor said inflation was "running wild", causing real wages to decline and driving down living standards.
The wage price index jumped 1.3 per cent in the September quarter, the biggest such increase on record, driving annual pay growth to 4 per cent.
But Mr Taylor said real wages had "gone backwards" in the past year.
"It's not your pay packet that counts, it's the purchasing power of that pay packet - what it can buy," the Liberal MP said.
"And it's gone sharply backwards, particularly for working families ... and that's an enormous amount of pain."
Dr Chalmers said inflation was slowing, and its annual growth rate was about a third lower than the peak reached late last year.
He said higher petrol prices driven by international factors had been the main contributor to inflation in the September quarter and the government still expected the annual consumer price index to ease to within the 2 to 3 per cent target band in 2025.
But the treasurer admitted the global outlook remained troubling and uncertain.
"It's an unfortunate sign of the times that a tepid global economy, expected to grow at its slowest two-year, non-crisis pace in two decades, is seen as an outcome worth accepting, if not welcoming," he said, but added, "that's because there is so much uncertainty still, and too much conflict, for us to be relaxed or complacent about global risks."
Those risks included the downturn in China's property market, the impact of the most rapid monetary policy tightening cycle in the history of the global economy, continuing pressure on supply chains and government budgets and conflict in Ukraine and the Middle East.
But "Australia is one of the best placed economies in the world to deal with what is coming at us," the treasurer said, citing high commodity and service export earnings, high business investment and a strong labour market.
"All this means that in a difficult environment, we're world leaders when it comes to getting capital moving and keeping our people working," he said.