Treasurer Joe Hockey declared all options were on the table as he begins the task of repairing the federal deficit, with opposition and welfare groups warning it could mean less money for family, health or education programs.
Mr Hockey’s first major economic statement since the coalition’s September election win points to a $47 billion deficit for 2013/14 - a $17 billion worsening from Treasury’s August estimate.
Business groups say the coalition has no choice but to cut spending.
The treasurer said if cuts weren’t made, Australia would risk a decade run of deficits and a debt blow-out to $667 billion.Mr Hockey’s first budget in May will address the expenditure issue, taking its cue from the national commission of audit and other reviews set up by the government.
‘‘All options are on the table,’’ the treasurer said on Tuesday.
Opposition Leader Bill Shorten said the coalition had promised before the election not to cut health, education, defence or pensions.
‘‘Tony Abbott told the Australian people one thing before the election and is doing the complete opposite in power,’’ he said.
The jobless rate is forecast to rise from about 5.8 per cent now to 6.25 per cent in 2014/15 and remain for the next three years, as economic growth hovers between 2.5 and three per cent.Australian Council of Trade Unions president Ged Kearney said the gloomy outlook meant public spending shouldn’t be slashed.
‘‘What we were really hoping for today from the government is they had a plan to address rising unemployment, stimulate the economy and create jobs - but what we are hearing is cuts,’’ she said.
Mr Hockey said he was being honest about the challenges.
‘‘Doing nothing is not an option for Australia,’’ he said.
‘‘If we want a dynamic, modern economy that delivers ongoing rises in living standards, the heavy lifting of deficit reduction will have to come from spending restraint rather than from a raft of new taxes.’’
Shadow treasurer Chris Bowen said the update was aimed at softening up Australians up for ‘‘deep and brutal’’ budget cuts.
He played down Labor’s hand in the 2013/14 budget blow-out, saying $10.2 billion of the $17 billion increase was due to Abbott government decisions taken in the past few months.
Business Council chief Jennifer Westacott said political parties must be honest about the cost of government programs and what was affordable.
‘‘A disciplined 2014/15 budget, which includes structural measures that contain government expenditures over time, needs to be matched by greater efforts to boost economic growth and productive capacity,’’ she said.
UnitingCare Australia national director Lin Hatfield Dodds said successive governments had struggled to align social and economic goals.
‘‘Achieving a better balance will require collecting more tax, and could be achieved by winding back inefficient and unfair tax concessions,’’ she said.