The government will reveal a larger deficit when it hands down its mid year budget update next week, Treasurer Joe Hockey has confirmed, as well as a longer delay in returning the country's finances to surplus.

The Treasurer has also admitted the government "made a mistake" in communicating with voters earlier this year, conceding "we neglected the conversation" about some of the tough measures the May budget contained.

In an interview with Sky News on Friday, Mr Hockey said the budget had faced significant "headwinds" including a global economic slow down, falling iron ore prices and a hostile Senate.

He said Monday's update would reveal a deeper deficit and the return to surplus would be pushed back beyond 2018. A number of reports have anticipated a larger deficit in recent months, with analysts anticipating a budget hole of as much as $51 billion.