Jim Chalmers has signalled that Labor MPs and advocates for welfare recipients should curb their expectations about big new spending in next month’s budget, as an expert committee called for tens of billions more on unemployment payments, rent assistance and childcare subsidies.

Releasing the latest report from Labor’s hand-picked Economic Inclusion Advisory Committee on Friday, the treasurer cautioned that extra help for Australians doing it tough had to be weighed against other priorities and fiscal challenges.