The deficit forecast for the federal budget has blown out to $40.4 billion.
That compares with the $29.8 billion deficit predicted by Treasurer Joe Hockey in May.
The treasurer released his mid-year economic and fiscal outlook on Monday.
Deficits over the next three financial years are also expected to be larger than forecast in the May budget.
It means the deficit in 2017/18 is now expected to be $11.5 billion rather than the $2.8 billion previous estimated.
The report blames two factors for the $43.7 billion deterioration in the budget over the four-year estimates - the impact of the economy on tax receipts and payments, and the Senate's handling of May budget measures.
It says a 30 per cent collapse in the iron ore price and weaker-than-expected wage growth has resulted in tax receipts being revised down by $31.6 billion.
Delays in passing legislation and negotiations with the Senate have cost the budget more than $10.6 billion over the forward estimates, "keeping debt and interest payments higher for longer".
Despite the deterioration, the budget review says a wafer-thin surplus of 0.8 per cent of GDP is projected for 2019/20.
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