A major business group expects the federal government to dump its plan for a deficit levy in next week's budget.
The Australian Chamber of Commerce and Industry describes the levy as ill-advised, saying it would hit business and consumer confidence.
The government is considering introducing the temporary measure in its first budget next Tuesday, with speculation that those on incomes of over $80,000 could be affected.
But ACCI is warning against any tax hike, saying it breached an election commitment.
Releasing ACCI's latest business expectations survey, acting chief economist Burchell Wilson said the levy would create a disincentive to investment and employment, and damage business and consumer confidence.
"A debt levy is poor policy, it's ill advised," he told reporters in Canberra.
The March quarter survey found that while expectations had improved slightly, actual business conditions remained poor.
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