Treasurer Joe Hockey has admitted his promise of a balanced budget in four years cannot be achieved, blaming many of the same external factors Wayne Swan used to cite, and for which he was condemned by the Coalition.

Mr Hockey will instead unveil a deeper deficit for 2014-15 and a slower return to surplus when he delivers Treasury's mid-year fiscal and economic outlook on Monday.

After a year of political paralysis around unpopular budget measures, Mr Hockey has also admitted to making mistakes in his first full year, such as dedicating insufficient time and effort to the "sales" job of the May budget.

"We made a mistake, I mean, I fully accept that we could have done more marketing," Mr Hockey said of the Abbott government's 2014 descent in opinion polls caused by a poorly received budget.

"In 2015, you are going to see more of a conversation, more community engagement. We are going to work harder with the Australian people to lay down the plans for our future growth."

The May budget had projected a small deficit in 2017-18 of $2.8 billion portending an unspecified surplus the following year.

However a softening economy, collapsing iron ore prices, low business and consumer confidence, and an unco-operative Senate have derailed the government's fiscal repair task.

The politically embarrassing admission has thrust Mr Hockey into the same position as Mr Swan who also suffered revenue write-downs.

Mr Swan's excuses exposed him to withering attacks by Mr Hockey and then opposition leader Tony Abbott.

"No qualifications, all the excuses that Wayne Swan talks about – falling commodity prices, a high Australian dollar, nominal growth not being up to standard. Somehow the GFC is ongoing all the time," Mr Hockey said in 2011.

"So yes, we are upset about this ... they think the Australian people over summer will forget the solemn promises."

Asked if MYEFO will show the deficit has deepened, Mr Hockey said: "Well, yes it will. We have faced some significant headwinds this year. Obviously the global economy has come off a bit, iron ore prices have dropped dramatically and we have had some opposition in the Senate that has made it harder."

Mr Hockey's statement was a formal recognition of what economists had warned of, namely, that the situation was worse than officially forecast, leading to - as Chris Richardson of Deloitte Access Economics predicted - "deficits as far as the eye could see".

Citing collapsing revenues from a world iron price - currently $US69 a tonne, down from $US93 a tonne at budget time - Mr Hockey revealed the MYEFO statement would contain new spending cuts but said they would be modest and would not harm the economy.

There would also be some new spending measures, but the Treasurer reinforced an earlier message that he would not try to replace declining revenue from commodities with new taxes or spending cuts.

He said the delayed surplus was a deliberate measure to avoid dampening economic activity with a sharp withdrawal of public money.

"We want to keep the economy going, we want to keep it strong ...we want to keep that momentum going," he told Sky News.

With iron ore now making up one-fifth of all Australian exports, the tanking price spells serious trouble for Commonwealth revenues.

The admission comes after Reserve Bank governor Glenn Stevens severely criticised Australia's federal politicians, including independent senators, for failing to take the government's budget repair job seriously enough.

Mr Stevens warned on Friday that politicians needed to "get real" about fixing medium-term budget difficulties and gave them a five-year time frame to do something about it if they wanted to avoid potentially losing Australia's AAA-credit rating.

But the governor also criticised the modern political "fixation" on being in surplus by a particular year, saying the over-simplification of the debate had made it harder to explain why deficits can be useful.

"I think we have had a tendency to kind of have a few soundbites - surplus good, deficit bad - and as long as we have got a surplus, you know, don't worry about it," Mr Stevens told Fairfax Media.

"Well, it actually matters how you get the surplus [and] it matters what you did with it."

Responding to Mr Stevens' comments about the need for politicians to get real about the budget difficulties, Mr Hockey said one of the "significant challenges" facing the budget had been the amount of opposition in the Senate to savings measures .

"Opposition Leader Bill Shorten took great pride in his opposition this year, saying 2014 was defined by the force of Labor's resistance," Mr Hockey told Fairfax Media.

"Australia simply cannot afford that blind opposition."

Mr Shorten said he was bemused by the Treasurer's admission that his budget sales job had not been good enough.

"No amount of slick marketing will convince Australians that this budget is fair or delivering on the promises Tony Abbott made at the last election," Mr Shorten said.