There is growing concern in the upper ranks of the federal bureaucracy that the budget process is adrift, with just two months to go before it is delivered.

The ABC has spoken to senior officials across several portfolios who say they are confused by what the Abbott Government wants to achieve with its second financial blueprint, as it struggles to settle key elements from its first.

Time is fast running out for ministers to set a clear direction.

"It's five minutes to midnight," one said.

The confusion in the bureaucratic ranks is a product of the mixed messages being sent by both the Prime Minister and Treasurer: that hard choices have to be made to repair the nation's finances; and that much of the work is already done.

Prime Minister Tony Abbott moved to clarify his position on Wednesday saying the Intergenerational Report showed the Government had the budget on track to be "broadly in balance" in five years.

"We get very close to balance," Mr Abbott said.

"Well within 1 per cent of [Gross Domestic Product], we get very close to balance in 2020."

The Intergenerational Report shows that with the cuts the Government has been able to secure so far, the deficit falls over the next five years, but never reaches a surplus, and after 2020 the deficits continue to rise for the next 35 years.

And the revenue estimates in that report are already out of date. It was built on the assumption that the iron ore price would be $60 a tonne.

The price of iron ore recently hit a six-year low of $US57.70 a tonne.

The ABC understands that, as a result, the $40.4 billion deficit projected for this financial year in the Mid-Year Economic and Fiscal Outlook has worsened.

The May Budget forecast a deficit of $29.8b this financial year.

Prime Minister Tony Abbott says this chart from the Intergenerational Report suggests current policies will get Australia close to budget balance in about five years.

Government makes difficult decisions: bureaucrats

Nigel Ray, deputy secretary of Treasury's fiscal group confirmed at a Senate hearing on Wednesday that the current fiscal settings would never move the budget from the red to the black.

"There is no surplus across the 40 year projection period," he said.

Surpluses could only be achieved by making difficult decisions.

"There would need to be either the Government's announced policy or some replacement for them," Mr Ray said.

Those sentiments were echoed in conversations the ABC has had with senior bureaucrats who said that the Government has not settled on a consistent approach to the budget.

They believe there is now little appetite in Government for any more Budget repair.

"We can make the bullets," one said.

"But someone has to fire them."

The Prime Minister is selling the next budget as a "dull" document that will balance prudence with largess.

"This will be a budget that is prudent, frugal, responsible," Mr Abbott said.

"But there'll be something in it for families, a better child-care deal in particular, and there'll be much in it for small business, particularly the tax cut that small business is yearning for.

"Because we want to unleash the creativity of our small business people and the best way to do that is for the dead hand of Government to rest less heavily upon them."