Australia are due to play three Tests, five one-day matches and two Twenty20 games during their August 6 to September 20 tour of Sri Lanka.
"We are taking austerity measures because we can't even recover the monies we are spending," minister Mahindananda Aluthgamage said.
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"Lots of frills like distributing hundreds of free tickets and banquet meals for invitees will be cut," Aluthgamage told AFP.
Sri Lanka Cricket (SLC) had budgeted 300 million rupees ($2.8 million) but the projected income was a "dismal" 150 million rupees. Sri Lanka now hopes to spend about 100 million rupees instead on the tour, said the minister, who has moved to overhaul the cricket administration amid allegations of massive corruption and mismanagement.
Security will not be compromised, he said, after ordering the SLC to trim the 50-million-rupee security bill to just nine million rupees.
Despite ending a decades-long ethnic conflict with Tamil Tiger rebels in May 2009, Sri Lanka maintains tight security for