Lexi Metherell reported this story on Monday, November 5, 2012 08:03:00

TONY EASTLEY: As the Prime Minister no doubt talks up the Australian economy in Laos, this morning there are more arguments over the Government's book keeping and its predictions.



An economic forecaster says the Government's budget is in worse shape than the mid-year update would suggest.



In its mid-year budget assessment Deloitte Access Economics says Wayne Swan's projected slim surplus of $1.1 billion is actually more likely to be a deficit of around $4 billion.



A key shortfall in the budget is the mining tax, which is expected to yield very little this financial year.



AM's Lexi Metherell is speaking here to Deloitte Access Economics director Chris Richardson.



CHRIS RICHARDSON: It's got a lot to do with China and China's slow-down has really cut into national income growth in Australia.



In Australia in a typical year you'd get national income growing by $80 billion, or $85 billion.



Treasury's got it forecast at growing somewhere around $60 billion this year, we would think maybe even a little less than that, and that hits the tax take really hard.



The new mining tax is perhaps the biggest example of that, but it's true in company taxes, it's true in a bunch of taxes.



LEXI METHERELL: Does that make pursuing a surplus reckless?



CHRIS RICHARDSON: Look not reckless, but it certainly makes it a lot harder and it suggests to me that maybe the benefits of achieving a surplus in 2012/13 aren't that great anyway.



The budget depends on the size of the national economic pie. This year that's growing quite slowly. It means tax is falling short. That makes it quite hard to get a surplus and perhaps not that sensible.



TONY EASTLEY: Deloitte Access Economics director, Chris Richardson.