Treasurer Wayne Swan is being told to abandon his plan for a budget surplus in the next financial year.

Economic forecaster Deloitte Access Economics says the budget is heading for a deficit of almost $2 billion in 2012-13.

If correct, that would be a $5 billion turnaround on the Government's last prediction in May.

The firm's director Chris Richardson says many economists would regard the result as a "rounding error", but says it will cause political pain for the government.

And he warns further cuts to spending as the Government tries to honour its pledge to get back into the black by the end of 2012-13, which he says could harm the economy.

"That promise is looking in trouble," Mr Richardson said.

"You've seen just enough weakness in the economy, in jobs, in profits, in share markets, to mean that what was always a small surplus has become a small deficit.

"It is a rounding error in a $400 billion budget.

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"The Government had looked for a surplus of about $3.5 billion, we now see that next year at just under $2 billion deficit. Both figures are wafer thin in the context of a $400 billion budget, but the politics of that are tricky."

Mr Swan spoke to AM but would not elaborate on what further savings the Government is looking for to deliver the promised surplus next financial year.

"We'll take commonsense decisions," he said.

"We're always on the lookout for savings. We've been up for a very big savings task over four years. We will be making further savings with this process but we'll do it in a way that's consistent not only with the economic outlook but with our fiscal rules."

Mr Richardson said the Government could look to cut spending or increase taxes to keep the surplus promise, but he cautioned that might do more harm than good.

"This promise was always a political one, or a political line in the sand to get a surplus next year rather than something that the economists demanded, but it wasn't a bad idea in the sense that it gave a backbone to the budget outlook," he said.

"The problem is that same promise is starting to turn into a bit of a risk for the economy. Right now, if we have to raise taxes or fees or fines or cut back in spending just to meet that political promise, that does run the risk of the budget hurting the economy rather than helping it."

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Shadow treasurer Joe Hockey has seized on the Access report, saying he doubts the Government will be able to meet its target.

"This just confirms what we've been saying for an extended period of time," he said.

"Labor can't deliver surpluses, it's not in their DNA. They haven't delivered one since 1989-90, and I suspect they're not ever going to deliver a surplus."

But Mr Richardson says there are some aces up the Government's sleeve.

Coal exports are expected to remain high well into next year, there is still a lot of recovery to come from the Queensland floods and cyclones, and mining investment is powering ahead.

However the big uncertainty is Europe - something described in the Deloitte Access Economics report as a "ticking time bomb".

"The most likely thing is more of the same ... but yes, there's a chance that things go sufficiently wrong in Europe to blow up some banks there, and that's the key.

"Remember, markets can act faster than politicians can react, and that is very true in Europe, where whenever there is a problem they have to call a committee and that gap, that risk, is a bank-related one.

"The US economy might be weak, but it was already weak. The risk is that Europe blows up some banks and that then transforms into a wider impulse through the world, potentially hurting that great wall of economic strength around Australia's economy, China's growth."