Cabinet minister Christopher Pyne has declared a Federal Labor government will plunge Australia's economy into recession.

Mr Pyne said Labor's policies to reform negative gearing and capital gains tax, as well as ending cash handouts for non-taxpaying shareholders on their dividend credits would hurt the nation.

"There will be a recession in Australia if Labor wins. Mark my words, you can mark it down today," he told Sky News.

Opposition frontbencher Richard Marles laughed off Mr Pyne's bold prediction, labelling it a scare campaign.

"Ever since coup week, the only strategy you guys have got left is fear," Mr Marles told Sky News.

He said the idea Labor would cause a recession was the most ridiculous thing he had heard.

Mr Pyne said the economy was thriving under the coalition, pointing to low interest rates, decreased taxes and a predicted return to budget surplus.

The latest federal budget figures released on Friday showed a deficit of $15.3 billion at October 31, just short of the forecast $14.5 billion deficit for 2018/19 financial year.

A return to surplus is expected in 2019/20.

"Policies to reduce income to retirees and households will mean there's less money circulating in the economy as you (Labor) hoover it up with higher taxes," Mr Pyne said.

But the senior Labor MP returned serve, arguing record low wages growth and a structural deficit in the budget showed things weren't so rosy.

"If you think the economy is going tickety-boo with all the things you just quoted, you run with that because out there that's not what people are feeling," Mr Marles said.