Treasurer Joe Hockey has hinted the Federal Government will push ahead with a tax on bank deposits while blaming the Labor government for the budget deficit.

When asked on Network Ten's The Bolt Report whether he would be introducing a bank deposit tax, Mr Hockey hinted he would introduce the tax first introduced by Labor in 2013.

Assistant Treasurer Josh Frydenberg has previously refused to provide any details on the policy, but Mr Hockey has confirmed the policy will mirror Labor's.

"Any announcements or decisions around this proposed policy which we discussed at the last election will be made in the lead-up or on budget night," he said.

The Bolt Report host, Andrew Bolt, asked the Treasurer if he could confirm any details of the policy, expected to be introduced in the May budget.

"You can't guarantee the trajectory of our debt will be altered by the next budget; all we know so far is that you're considering a bank deposit tax now of about 0.5 per cent for every deposit — I mean, another tax," Bolt said.

Mr Hockey responded by saying the Government would have to impose unpopular measures to reduce the budget deficit.

"There [are] many things I don't like that I have to implement at the moment that have been the legacy from six years of bad Labor government," he said.

"Let's just go back to — this was announced by Chris Bowen. So, it is Chris Bowen's tax. And it was announced, he said, on the recommendation of all the regulators and it's five basis points on deposits, and it's meant to pay for a potential bank failure and, as a trade-off, Australians with up to $250,000 in their bank accounts have a government guarantee.

"Now what happened was he decided to collect the money before a bank failure. Previously, the policy has been that you would impose a levy to recoup money after a bank failure."

Asked later by journalists why he did not "knock [the deposit tax] on the head right now", Mr Hockey said the policy was being considered by the Murray review into Australia's financial system.

"We are in the process of discussing it with key stakeholders," Mr Hockey said.

"We are consulting widely on it, we'll have more to say about that in the future."

Mr Hockey said the Abbott Government was still committed to delivering a budget surplus but was being constrained by locked-in expenditure and the Senate.

"Well we want to do it faster but we are constrained by the fact that we cannot get legislation in some areas — not all areas, but some areas — through the Senate," he said.

Government paper will discuss potential tax creep

The Government will Monday morning release a discussion paper canvassing potential changes to the taxation system.

Mr Hockey confirmed it will warn that Australians will have to pay ever increasing amounts of tax, unless welfare entitlements are cut.

"If Labor and the Senate keep blocking reductions in government expenditure, then the only way we can live within our means is to massively increase taxes," he said.

"That is not what we want to do, so we are trying to get government expenditure down.

"We want to see a reduction in government expenditure ... and a competitive taxation system that mean that we can compete."