Australia has been relying on one of the highest population growth rates in the developed world to maintain economic growth, and the Government's latest budget is no exception.

While the budget forecasts of 3 per cent economic growth over the next four years look plausible, they rely on the population continuing to increase almost 1.5 per cent per year.

The Government doesn't give that number in the budget, even though population change is a key "parameter" for the nation's finances, but former Treasury official and Industry Super chief economist Stephen Anthony calculated it from other numbers in the budget.

The maths is relatively simple: productivity growth is expected to be around the 30-year average of 1.6 per cent (itself a big stretch, given that it's currently growing by well under half that rate) and, with the labour force participation rate expected to be steady on this year's level, it will take a growing population to fill the gap and get to the 3 per cent forecast.

Given Australia's current birth rates, most of that growth would need to come from continuing Australia's current high immigration intake.

And the GDP and revenue growth the Government is counting on also assumes that almost all of those new migrants get a job quickly, something reflected in the budget's forecasts of a gradually declining unemployment rate.

How immigration might impact surplus

If immigration levels fall, as suggested by some in the Coalition, such as Tony Abbott, then Treasury's economic growth forecasts look unrealistic and the budget surplus with them.

At the same time as the Government has effectively baked in high immigration through its budget forecasts, it is also trying to contain real spending growth to 1.6 per cent per year.

The Turnbull Government has a good track record in this area, with spending growth below 2 per cent per annum — the lowest in five decades — but it has to tighten its belt further to hit the restraint needed to ensure the budget will remain in surplus despite its first round of income tax cuts.

The reality of the equation, if the Government does succeed in further curtailing spending growth, is that real expenditure per person will be flat.

Aside from public service efficiencies — the vast bulk of which must surely have been had after years of staff cuts and "efficiency dividends" — the best case result of this will be that public service levels stagnate.

They may even get worse, with most long-term demographic and economic projections factoring in an aging population that will place greater demands on health and aged care, areas where costs are rising faster than most other sectors.

Will $75bn for infrastructure be enough?

A rising population will also place greater demands on Australia's already stretched urban infrastructure, meaning the Government's planned $75 billion 10-year investment in transport infrastructure may not even keep up with increasing demands.

The reliance on near-record levels of immigration to sustain the economy at a pace that can pay for tax cuts and a budget surplus is illustrative of the precarious nature of Treasury's path to a meaningful 1 per cent of GDP surplus by the early to mid-2020s.

Stephen Anthony labels it "economics and budgeting by trend line", where Treasury has picked the medium or long-term average that suits the budget bottom line best — sometimes 10-year, sometimes 20, sometimes 30 — and projects it going forward.

Not that this Government is unique in the practice. As Scott Morrison pointed out, Wayne Swan was repeatedly guilty of over-forecasting and under-delivering when it came to revenue forecasts.

Sorry, this video has expired Migration accounted for two thirds of Australia's population growth last year.

Budget 2018 a 'well-crafted fudge'?

If anything, the Government can legitimately claim to have dialled back some of its main economic forecasts to plausible levels, with revenue comfortably surpassing expectations for the first time since the Howard-Costello, mining boom era.

But Stephen Anthony said this budget was still "a well-crafted fudge".

"They pick those parameters that are really important and, in that key year, bump them up."

He also points out that the budget's economic growth, household consumption and wage growth forecasts, while not wildly optimistic, are still far from conservative.

Just because Australia hasn't had a recession in 27 years doesn't mean it won't have one — past performance is not an indication of future performance, as financial product disclosure statements always state.

In his budget speech, Mr Morrison gave a strangely similar warning.

"The forecast outcome for 2019-20, as always, is subject to Treasury's assessment of economic conditions at the time of the budget," he said.

It's almost as if Scomo himself thinks these projections will prove too good to be true.