The Federal Government has been served a fresh warning about the state of the budget, documents obtained by the ABC reveal.

Key points: Pre-Election Economic and Fiscal Outlook (PEFO) projected budget deficit of $37.1b this financial year

Pre-Election Economic and Fiscal Outlook (PEFO) projected budget deficit of $37.1b this financial year Commonwealth Government debt levels expected "to reach recent historical highs"

Commonwealth Government debt levels expected "to reach recent historical highs" "Underlying cash surpluses" not possible without higher taxes or reducing spending growth: PEFO

The Finance Department has sounded the alarm in a private internal briefing to Finance Minister Mathias Cormann, casting renewed doubt over Australia's path to surplus.

"The 2016 Pre-Election Economic and Fiscal Outlook (PEFO) reports a significant fiscal challenge for the Government," the document, released to the ABC under Freedom of Information laws, said.

"There are significant downside risks to achieving this surplus."

The PEFO — released by Treasury and Finance Department heads in May — projected the deficit would be $37.1 billion this financial year and a surplus would be reached in 2020-21.

The blunt assessment pinpoints key risks to getting the nation's finances back in the black:

new drugs being listed on the Pharmaceutical Benefits Scheme;

new drugs being listed on the Pharmaceutical Benefits Scheme; the National Disability Insurance Scheme growing beyond expectations and;

the National Disability Insurance Scheme growing beyond expectations and; payments to states and territories after natural disasters.

"Commonwealth Government debt levels are projected to reach recent historical highs, both on a gross and net basis," the PEFO said, with Commonwealth debt expected to hit $347.1 billion next financial year.

"Should Australia experience a significant negative economic shock, the fiscal position would be expected to deteriorate rapidly from current projections."

The PEFO document also raised the prospect of higher taxes.

"Without considerable effort to reduce spending growth, it will not be possible to run underlying cash surpluses, say in the order of 1 per cent of GDP, without tax receipts rising above 23.9 per cent of GDP," it said.

The department said measures the Government was yet to legislate — including paid parental leave and university changes — risked blowing out the deficit if they were rejected or amended by the Senate.

Government, Labor agree to $6 billion in savings

Labor yesterday agreed to support the Government's so-called omnibus savings bill, achieving $6.3 billion in savings.

Labor has agreed to support 20 of 24 measures while the Government has agreed to abandon a payment for new parents and a Family Tax Benefit supplement for families earning above $80,000 a year.

But Treasurer Scott Morrison warned Australia's AAA credit rating — which affects the cost of public and private debt — is still not secure.

"It helps but it doesn't resolve the issue completely," Mr Morrison said.

"I think what this demonstrates to the [credit] ratings agencies is that government in this 45th Parliament can get savings through the Parliament," he said.