THE federal government's promise to bring the budget back to surplus is based more on politics than economic necessity, a leading independent forecaster says.
As Labor prepares to release its mid-year budget review on Monday morning, Deloitte Access Economics director Chris Richardson says while the task of repairing budgets cannot be shirked, it shouldn't be rushed.
"Governments need to pay their way over time, but we still think that a surplus in 2012/13 is partly a political target rather than an economic necessity," he said in the company's business outlook released on Monday.
The government's Mid-Year Economic and Fiscal Outlook (MYEFO) is widely expected to stick to the May budget forecast of a $1.5 billion surplus this financial year, even though it needs to find further savings.
Mr Richardson said federal and state governments were all scrambling to repair "broken" budgets after spending the past decade dishing out the revenue proceeds of the commodity price boom.
"But a shockwave in commodity prices means the tax take will (now) stay soggy," he said.
At the same time, the fact the Australia dollar is still riding high when commodity prices are down is creating headaches across the industrial landscape.
"Some miners are losing money, and mining services ... are now feeling the pressure of cost cutting," he said.
New sectors were joining the "trouble list" of manufacturing, utilities and retail, at the same time as the government was "jumping on the anchors" of spending.
However, Mr Richardson said the engineering construction sector still had an enormous workload ahead because of increased mining investment.
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