A new report predicting a $24 billion federal budget blowout over the next four years makes it more important the parliament passes the government's savings measures, Treasurer Scott Morrison says.
Deloitte Access Economics says a boost to national income from a sharp rise in coal prices will only partly offset a deterioration in tax revenues because wages and jobs growth are running slower official forecasts in an economy that isn't "shooting the lights out".
Its economist and ardent budget watcher Chris Richardson expects the budget deficit to be $40.5 billion in 2016/17 rather than the $37.1 billion forecast in the May budget, with further deteriorations out to 2019/20.
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Mr Morrison, who has confirmed he will be releasing the mid-year budget review on December 19, says Deloitte correctly identifies the need for more important savings measures to be passed by parliament, that are opposed by Labor.
"This reinforces the position adopted by rating agencies who continue to watch our parliament to see whether they will support the government's approved pathway to restore the budget to balance," Mr Morrison told AAP on Monday.
But Labor is concerned this deterioration will make a promised return to surplus in 2020/21 even more difficult.
"With the ratings agencies already expressing concern about the budget position, any further blowout of this nature will put our hard-earned AAA credit rating at even more danger of being lost," shadow treasurer Chris Bowen and finance spokesman Jim Chalmers said in a joint statement.
They believe the government should immediately abandon its $50 billion tax cut for big business, which will "smash the budget when Australia can least afford it".
Senate powerbroker Nick Xenophon supports a tax cut for businesses up to $10 million in turnover only because it covers the majority of Australian firms, rather than the government's plan for cuts for all companies over the next decade..
But he believes before considering further tax cuts there ought to be an industry plan to deal with the tens of thousands of jobs that will be lost when automaking in Australia "falls off the cliff" at the end of next year.
"That's the sort of thing where ... government needs to be focusing on," he told ABC television.
"Otherwise, corporate tax cuts will be a little bit like 'voodoo economics'. It is trickle-down economics - it doesn't really work, it's not targeted in the way that it ought to be to grow jobs."
