About 3,000 jobs in the Australian Tax Office (ATO) will go and more than 200 spending programs will be slashed in next week's federal budget.

The ATO's Second Commissioner Geoff Leeper wrote to staff this morning asking them to be patient and saying he would be in touch after the budget to explain what the final details will mean.

Treasurer Joe Hockey wants to shrink the size of Government in his first budget and thousands of public service staff will be retrenched.

He says despite the cuts he remains proud of his budget.

"On Tuesday night I think people will see that thanks to the hard work of my colleague Mathias Cormann, the Prime Minister, everyone, the Coalition is going to build a stronger more prosperous Australia," Mr Hockey said.

Last year, the ATO announced 900 jobs would go as a result of an efficiency dividend.

Community and Public Sector Union (CPSU) national secretary Nadine Flood says the axing of jobs will hurt small business and damage service delivery.

"If you cut 3,000 jobs in the ATO, that will damage their capacity to help small business, help industry and ensure we raise tax revenue appropriately," she said.

"Cuts of this magnitude to the Tax Office would do enormous damage not just to jobs but to services and our capacity to actually raise tax revenue so that you can fund the things the community wants of government.

"You can't cut to that level without impacting on services."

There will also be major changes in the environment, transport, industry, agriculture and Indigenous portfolios as the Government moves to implement its policies.

But Federal Education Minister Christopher Pyne says he is not expecting job cuts across his portfolio.

He told Channel Nine he is actually looking forward to Tuesday's budget.

"My portfolio has already been split between employment and education, so one department has become two," he said.

"I've already therefore had quite a cutback in public servants over the last seven or eight months."

The Opposition's Infrastructure spokesman Anthony Albanese has criticised the Government over reports of widespread job losses in the public sector.

Mr Albanese told Sky News the axing of jobs from the ATO could end up costing the Government more money than it saves.

"It's another example of a government cutting off its nose despite its face," he said.

"If you reduce the number of people working in terms on the tax system, ensuring that revenue is collected from people who should be paying it, then you'll reduce the money to the Government."