Treasurer warns of budget pain in Australia

Economists are tipping the Reserve Bank will keep interest rates steady at 7.25 per cent today.

Interest rates are at a 12-year high after the central bank increased rates twice this year because of concerns about inflation.

And Mr Swan told Fairfax Radio there is unlikely to be much joy in the budget.

"It's going to be a tough budget, it is going to involve some pain, there's no doubt about that," he said.

"We've got to put in place the settings which not only put downward pressure on inflation, but also make the investments for the future so we can lift the productivity of this economy and create wealth without creating inflation in the way in which we have in recent years."

Source: By Australian Broadcasting Corporation