Scott Morrison has emphasised measures to address the rising cost of living will be central to next week's budget.
It comes as Labor's shadow treasurer accused the government of ignoring rising costs of items such as petrol and groceries during their terms in office.
With less than a week until the 2022/23 budget is handed down, the prime minister said work was being finalised on ways to lessen the soaring costs of essentials.
"Addressing those cost of living pressures will be a key priority of that budget," he told the Nine Network on Wednesday.
"We've been carefully designing our response because what we don't do is have knee-jerk reactions on things like the economy."
The government will be hoping to use the budget as a springboard ahead of the federal election due in May.
Shadow treasurer Jim Chalmers said he would not be surprised if the government introduced a temporary cut in the fuel excise in the wake of rising petrol prices.
The government has hinted at the possibility of the cut in Tuesday's budget, but the measure has not been confirmed.
While petrol prices have soared following the invasion of Ukraine, Dr Chalmers said living costs had been a wider issue for years.
"The cost of living pressures on Australian working families didn't begin when Russia attacked Ukraine, they began when the government started attacking wages and job security," he told ABC Radio.
"There will be something in the budget along this line (of cuts in the fuel excise) - let's have a look at what (the government) propose, let's make sure that it's responsible."
Opposition Leader Anthony Albanese remained tight-lipped on whether Labor supported calls to temporarily cut the 44.2 cents per litre fuel excise, in the wake of rising petrol prices.
"We'll assess all of it, we'll wait and see," he told ABC TV.
"There's a range of measures that are putting pressure on family budgets, the biggest of which is that we just simply aren't keeping up with the cost of living."
Dr Chalmers said he would hand down his own budget later in the year should Labor win the election, leading the government to accuse the opposition it would spend recklessly should they be in office.
The shadow treasurer hit back, saying Labor would be financially responsible.
"Our priorities ... are responsible and affordable priorities, whether it's responsible investments in childcare or in TAFE to address skills shortages or in cleaner and cheaper energy," he said.
"These are the sorts of investments that have gone missing for the last decade."
It comes as the government announced on Wednesday $5.4 billion of funding would be in the budget to build the Hells Gates Dam in north Queensland.
The government will guarantee funding to build the dam, which is expected to create 7000 jobs, subject to completion of the final stage of the business case, expected in June this year.
Up to 60,000 hectares of irrigation would be opened up through a 2100 gigalitre dam bolstered by three downstream irrigation weirs.
"We've done the homework on Hells Gates Dam and it's now time to get on and build it," Mr Morrison said.
Queensland Water Minister Glenn Butcher said it was "interesting that the PM has time to sign off on a dam with an unfinished business case when he still hasn't put pen to paper on the state disaster relief package".
"The Hells Gates business case is not yet complete - this means it hasn't even received necessary federal approvals," he told AAP.
