Mr Abbott on Wednesday said that despite the government's failure to pass a raft of unpopular policies, the budget "does in fact get close to surplus and ongoing deficits are halved" under measures passed so far.

"Ongoing deficits are halved from the levels that the policies of members opposite would have delivered," he said.

"Not only is this government serious about economic reform but we have very significantly and substantially delivered the budget repair that we pledged to deliver."

The government is attempting to use the release of the Intergenerational Report to reframe the economic and political debate ahead of its make-or-break second budget, which is due in May.

The report, to be released on Thursday, models three federal budget scenarios – the budget settings inherited from the former Labor government, those that would exist if the reforms proposed in the first Abbott budget had all been implemented, and a third scenario that takes account of the reforms passed to date.

Treasurer Joe Hockey said on the report, which is expected to show the budget will never return to surplus on current settings, would kick start debate about where the nation is going over the next 40 years.

The report would serve as "the information pack that says 'look, this is a demographic trend, this is a trend in government expenditure, how are we going to pay for our future'?"

The release of the report comes more than two months before the federal budget is released, and ahead of major new policy announcements including a families package and others targeting small business and infrastructure.

"We are going to engage in a conversation with the Australian people and that is going to be in town halls and street corners. We are going to have a range of different people stimulating that conversation but we have got to get the information out to people," he said.

"We will get the information out but we are not doing it in a way that would be typical for governments to buy those rather droll ads that try and convince people to come this way. We actually want people to read the information, to understand it and discuss it."

Mr Hockey did not say how much the government would spend in spruiking the report.

Fairfax Media reported on Monday that federal government was so concerned about the presentation of the  report that it had spent $380,000 on focus groups to test reactions.

"You can't have Canberra try and lecture people about how they should live their lives."

The Abbott government released its politically explosive Commission of Audit, which was designed to help shape debate about the nation's finances, less than two weeks before its first federal budget last year in a move that Coalition MPs said, in hindsight, was a mistake.

But Mr Hockey brushed aside suggestions on Wednesday the government had deliberately chosen a different political approach with the Intergenerational Report as it looked to stimulate national debate and lay the ground work for its second budget.

"The budget is part of the equation. The budget is not the be all and end all for the economic debate and it's not the be all and end all debate that Australians want to have," Mr Hockey said.

Labor Treasury spokesman Chris Bowen said the report was a month overdue and that Mr Hockey "was in breach of the law of the land".

"We know he is planning a taxpayer-funded advertising campaign. He wouldn't answer questions about how expensive it would be. We know they have not accepted the advice of the Department of Immigration when it comes to the migration figures, an important figure in the Intergenerational Report which will underpin economic forecasts throughout the document," he said.

"We also know of course that the government has included a chapter on the Labor Party...and yet the Treasurer has the hide to claim this is not a political document. What he is doing is he is using Intergenerational Report as a prop to help his flailing campaign to sell his unfair budget."

The Intergenerational Report was introduced by former treasurer Peter Costello and is required by law to written every five years. It assesses the sustainability of the government's policies over 40 years. The current report was due, by law, to be released a month ago.

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