Treasurer Wayne Swan is expected to announce a new round of spending cuts aimed at plugging a multi-billion dollar black hole when he releases the Government's Mid Year Economic and Fiscal Outlook (MYEFO) this morning.

It is understood today's update will write down Government revenues by more than $20 billion over the forward estimates.

This year's deficit of $22.6 billion is likely to blow out to $30 billion because of the revenue hit and bigger than expected flood relief and natural disaster reconstruction.

Mr Swan says the economic turmoil in Europe has affected Australia's budget and says the Government remains committed to returning the budget to surplus by 2012-13.

Today's announcement is expected to outline billions of dollars in spending cuts or deferrals.

Mr Swan says the budget update will strike a balance between fiscal discipline and supporting jobs.

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Opposition finance spokesman Andrew Robb is not convinced the surplus will be genuine.

"This is a manufactured figure that they'll come up with," he said.

Mr Robb says the Government has not done enough to prepare Australia for the economic turmoil in Europe.

He says today's budget update needs to show how the Australian economy would cope if the global situation deteriorates.

"We need to see how sensitive are the budget numbers to a deep recession in Europe and China coming off the boil. If that's not there, then people can't believe one figure that's in that document," he said.

Greens leader Bob Brown has put forward his own plan for re-balancing the budget - including cutting tax breaks for mining companies.

"Let's recoup a little, rather than cutting into the budget," he said.

He said Treasury analysis shows the Greens' ideas would save $9 billion.

"We think it's better to recoup some of the mining boom by reducing these giveaways to the mining industry rather than cutting public services and jobs which are in the wider Australian public interest," he said.

The head of the Future Fund has backed the Federal Government's commitment to return the budget to surplus next financial year.

Chairman David Murray says it is important for the Government to cut spending.

"I think that is the right thing to do. I think they've got to stay there as best they can otherwise the Government here will keep crowding out the private sector and it only makes it harder for business," he said.

But economist Chris Richardson, from Deloitte Access, warns against cutting spending too deeply.

"What the Government's doing here is actually taking money back out again solely to get a surplus next year. And it's not clear that it's smart to have the Reserve Bank tipping money in, but the Government then taking it back out when the outlook, especially with Europe, is looking somewhat fraught," he said.

And he warned that if Europe's troubles worsen, Australia needs to be ready to respond.

"If next week Europe blows up we would have to throw a sudden u-turn in Australia's budget," he said.