Former Australian Treasurer Peter Costello says both sides of politics should delay spending until the budget is under control.
Prime Minister Julia Gillard warned on Monday that revenue for 2012/13 was expected to be $A12 billion less.
AAP reports the government is now set to deliver a deficit after forecasting a $A1.1 billion surplus last year.
Treasurer Wayne Swan will deliver his sixth budget on 14 May.
Mr Costello said plans to introduce a national disability insurance scheme, Labor's education funding boost and proposals by the coalition such as a paid parental leave scheme and a plan to deal with climate change should be shelved until the budget returns to surplus.
"Hey fellas, you are borrowing to fund the current spending," he said on ABC television on Tuesday.
"The easiest (spending) cut you will make is the stuff you never go into."
Mr Costello, who was federal treasurer between 1996 and 2007 said these would require borrowed funds to proceed because the budget was in deficit.
"Seeing we can't afford to pay for all the spending currently on the books why should we spend more?" he said.
"I would be looking at ways to reduce the spending now, to put some money aside in the future."
As treasurer in the previous coalition government, Mr Costello delivered 10 surpluses from his 12 budgets.
