The Australian Council of Social Service is urging the Abbott government to make its second budget much fairer than its first, saying low and middle-income households cannot continue to bear the brunt of spending cuts this year.

In its budget submission for 2015, it is calling on the government to try to restore revenue by fixing inefficient tax arrangements, rather than pursuing more spending cuts.

It has identified $13 billion of potential savings in the 2015-16 financial year, which rise to $18 billion in 2016-17, and says these can be used to restore the integrity of Australia's progressive tax system.

"This budget must be fairer that the last one, and the way this can be achieved is by seriously targeting wasteful spending at the top end, including tax expenditures, instead of pursuing policies that shift the burden on to people on the lowest incomes," ACOSS chief executive Dr Cassandra Goldie said.

"When two thirds of the structural budget deficit is due to declining revenues, we need a serious effort to restore revenue to adequate levels. Cutting deep into vital social and economic investments and services is the wrong approach and will cost us more harm in the long run," she said.

The budget submission follows comments from the chief executive of the Business Council of Australia, who this week urged the Abbott government to use its second budget to dramatically reshape Australia's policy direction.

It called for a "10-year plan," to be introduced in stages, that touches everything from health to education and welfare policy.

But ACOSS said the government's second budget must be used to target tax concessions that predominantly benefit people on the highest incomes.

It has also proposed a staged reform approach to provide investor certainty where necessary.

"We must ... take steps in this budget for long overdue reforms of negative gearing, superannuation tax concessions, and capital gains tax concessions, which collectively are costing us billions in foregone revenue," Ms Goldie said.

Some of the submission's biggest recommendations include removing the private health insurance rebate (saving $6.6 billion this financial year); tightening the Age Pension assets test ($1.35 billion); curbing the use of private trusts and companies to avoid personal income tax ($2 billion in 2016-17); and removing capital gains tax concessions for small business assets ($1 billion in 2016-17).

But it also proposes more spending measures, saying the budget must be used to fix the "youth unemployment crisis, with the unemployment rate running at over 20 per cent in many parts of the country".

It calls for $5.9 billion in new spending to support people in social and economic disadvantage.

"This budget cannot repeat the mistakes of the last one, which imposed the heaviest burden on those with the least capacity to carry it, and proved to be socially and economically damaging and divisive," Ms Goldie said.

After finding savings worth $13 billion this year, and proposing spending measures of $5.9 billion, the net savings available to the government are worth $7.8 billion in 2015-16, the submission says.