Business groups believe Treasurer Chris Bowen has missed an opportunity to improve Australia's competitiveness, encourage economic growth and provide jobs.
Mr Bowen released his much anticipated economic statement on Friday which projects weaker growth, a jump in unemployment and bigger budget deficits.
CPA Australia chief executive Alex Malley said this was the government's chance to articulate a credible economic vision for the nation.
"What we got was a schedule of measures to cut jobs and increase the cost of living in a rush to turn a $30.1 billion deficit this year into a modest surplus in 2016/17, " Mr Malley said in a statement.
"Will a rush to surplus help cement Australia's future prosperity and international competitiveness? The answer is no."
While he welcomed the government's attempt to account for the policy announcements made since Kevin Rudd was reinstated as prime minister, he said the fundamental problem remains that economic plans are still being developed with a return to surplus as the ultimate objective.
Finance groups are upset with plans for an insurance fund to eventually charge a 0.5 per cent levy on bank deposits, from 2016.
The Australian Bankers' Association said it would hurt depositors.
"The banking industry wants to see the federal government reconsider this decision as a priority and would like to see the coalition rule out the fund should it win government," chief executive Steven Münchenberg said.
The Customer Owned Banking Association, which represents credit unions and building societies, said the government should exempt smaller lenders from the levy to promote competition.
"Focusing the levy on the major banks means the levy is a prudent risk-management tool rather than a tax on depositors," spokesman Mark Degotardi said.
Australian Chamber of Commerce and Industry chief economist Greg Evans said the government had missed an opportunity to cut spending.
"We need to have a root and branch review of spending," he told reporters in Canberra on Friday.
Mr Evans said the expanding revenue hole was denting business confidence.
"It's all happening against a backdrop of a faltering transition in the Australian economy," he said.
A cut to the official cash rate next week would be welcomed, Mr Evans said.
Political hopeful and billionaire businessman Clive Palmer said Labor's mini-budget delivered a shrinking and unsustainable economy.
Rising unemployment and falling economic growth as outlined in the economic outlook means "Australia is heading towards oblivion", the Palmer United Party leader said.
Damaging tax hikes are at the heart of Labor's saving measures, says the Institute of Public Affairs.
"The economic statement is littered with tax increases, and is not a credible plan for systematically dealing with Australia's overspending problem," the think tank's senior fellow Julie Novak said.
Banking sector investors have already been hit by the deposits tax and savers are next in line if institutions pass on their new costs, Dr Novak said.
The Institute also took a swipe at the higher impost on tobacco - set to raise an extra $5.3 billion over the next four years - which it said will "hurt low income families the most".
"The fiscal management practices of the Rudd government so far has featured a lack of discipline in cleaning up the fiscal mess it itself has made," Dr Novak said.
The Institute of Chartered Accountants Australia wants the government to reconsider its commitment to return to a budget surplus by 2016/17.
Institute chief Lee White said Australia was staring down the barrel of tough economic times and in such circumstances a budget deficit was "appropriate".
Labor has repealed its planned 2015/16 $800 million budget surplus, instead nominating a $4.7 billion deficit.
But it stuck by a surplus, albeit reduced to $4 billion, the following financial year.
"Over the past three years we've seen write down after write down. It's time to start facing up to the facts - our forecasting has been off the mark," Mr White said.
The Institute welcomed news of the banking levy but questioned its timing.
It was critical of the government's failure to lift the $2,000 cap on the tax deductibility of self-education expenses, saying any such limit should be scrapped completely.
The Institute of Chartered Accountants Australia wants the government to reconsider its commitment to return to a budget surplus by 2016/17.
Institute chief Lee White said Australia was staring down the barrel of tough economic times and in such circumstances a budget deficit was "appropriate".
Labor has repealed its planned 2015/16 $800 million budget surplus, instead nominating a $4.7 billion deficit.
But it stuck by a surplus, albeit reduced to $4 billion, the following financial year.
"Over the past three years we've seen write down after write down. It's time to start facing up to the facts - our forecasting has been off the mark," Mr White said.
The Institute welcomed news of the banking levy but questioned its timing.
It was critical of the government's failure to lift the $2,000 cap on the tax deductibility of self-education expenses, saying any such limit should be scrapped completely.
