Treasurer Joe Hockey says he has inherited a budget deficit heading towards $40 billion in 2013/14.
That's $10 billion more than was forecast by Treasury and Finance before the September 7 election.
The additional amount is due to a decision by the new government to provide the Reserve Bank with a one-off contribution of $8.8 billion to help it perform its core functions in a volatile economic environment.
The payment comes straight off the budget's bottom line and increases the government's debt position.
"We've inherited this situation (from Labor)," Mr Hockey told reporters in Canberra on Wednesday of the need to make the payment.
News that makes sense
Your trusted source for staying up-to-date with the world around you. Get free daily news updates and analysis, straight to your inbox.
"I'm fixing their problems ... the things they were warned needed to be addressed and failed to address."
Mr Hockey noted former Labor treasurer Wayne Swan had taken a $5.22 billion dividend from the Reserve Bank in 2009 and another $500 million in 2013 to bolster his budgets.
The government will formally update the budget position when it releases the mid-year economic and fiscal outlook in December.
The government is also working on a new set of fiscal rules that it will use to return the budget to surplus.
Mr Hockey plans to release them when he hands down his first budget in May 2014.
"I have to deal with what the real state of the books are," he said, adding the government was going through them agency by agency.
"There are other parts of the government running technical losses and that to me is unacceptable."
