Acting Prime Minister Wayne Swan says he believes sticking to the federal government's plan to bring the budget back to surplus in 2012/13 sends an important message to financial markets that there is fiscal discipline.
Independent forecaster Deloitte Access Economics predicts a small budget deficit of $1.9 billion in 2012/13, rather than the $3.5 billion surplus forecast by the government, and does not expect a surplus until 2014/15.
But the treasurer, who is acting as prime minister while Julia Gillard makes her way home from the G20 meeting in Europe, remains determined to deliver a surplus as planned.
"It is really important that a country like Australia with such a strong economy demonstrates its capacity to put in place fiscal discipline," Mr Swan told reporters in Canberra on Monday.
"It sends a really important message to markets, to decision makers and to investors the government of this country had got the capacity to implement a clear and consistent disciplined fiscal policy."
He said there are a number of developed countries around the world that are paying the price for lax fiscal policy over a long period.
But the government will have to make further savings to get the budget back into surplus in 2012/13, the extent of which will be revealed in the mid-year budget review which will be released before Christmas.
Treasury is in the middle of updating its forecasts, but Mr Swan declined to give any indications of likely spending cuts or budget number changes.
"I can't give you the quantum," he told reporters.
Mr Swan also noted the revised economic growth forecasts released by the Reserve Bank of Australia on Friday that downgraded its economic growth forecast for this year and next.
But, he said, annual economic growth projections of three per cent, or 3.25 per cent, or 3.5 per cent, were still relatively strong.
Access director Chris Richardson says while a missed surplus outcome would be politically "horrendous", the promise was always a line in the sand drawn by politicians and not by economists.
Opposition treasury spokesman Joe Hockey believes delivering a surplus is "very much" an economic objective for a "big taxing, big spending" Labor government.
"Labor can't deliver surpluses. It's not in their DNA," he told ABC radio, adding it had not delivered one since 1989/90.
"Whilst they lecture the rest of the world about fiscal austerity, they fail to undertake it themselves."
Australian Greens leader Bob Brown says the government should not be panicked by the opposition into slashing spending "just to meet a budget line".
"Whether it comes in one billion up or one billion down is not going to matter nearly as much as the importance of appearing to have a steady hand on the tiller," he told ABC television.
