The latest round of budget cuts probably won't be the last if the federal government is intent on returning a surplus in the 2013 election year.
Treasurer Wayne Swan announced yesterday an extra $16.4 billion of budget savings over the next four years to keep its promised surpluses largely intact, after a troubled global economy took a further toll on tax receipts.
Mr Swan's mid-year budget review predicts a $1.1 billion surplus in 2012/13, down from the $1.5 billion surplus forecast in the May budget.
It would still be a massive turnaround from a final $43.7 billion deficit for 2011/12.
The economic growth forecast for this financial year in the mid-year economic outlook was also marked down to 3 per cent, from the earlier 3.25 per cent.
"This mid-year review has been put together amid storm clouds which are hanging over the global economy," Mr Swan said.
"This lower global growth outlook has had another very big whack at government tax revenues and has made it harder to deliver a surplus."
The latest round of savings includes a cut in the baby bonus from $5000 to $3000 for second and subsequent children from mid-2013, further changes to the private health insurance rebate and increased visa application costs.
"Our savings send a very clear message to the world that we have world-beating public finances," Mr Swan said.
Opposition Leader Tony Abbott said all the "incredible shrinking budget surplus" showed was that Labor's economic management was a failure.
"This is a government that will never, ever deliver an honest budget surplus," Mr Abbott said.
Institute of Chartered Accountants Australia's head of leadership Yasser El-Ansary said the budget forward estimates for revenue collections were probably still too optimistic.
"In early 2013, the government's razor gang is probably going to have to do some more work on spending cuts and tax increases if they want to deliver a budget surplus," Mr El-Ansary said.
Business groups were unhappy about the surprise announcement that companies will progressively shift to remitting taxes to the government each month, instead of quarterly, starting from 2014.
This will deliver a revenue gain of $8.3 billion over four years and make the system "more accurate, more timely and more clear," Mr Swan said.
"It's not an increase in tax. It's simply a change in the timing of it." AAP