The 2012-13 budget deficit has ended up slightly smaller than Labor forecast in the May budget - but Treasurer Joe Hockey says prospects for 2013-14 are looking even worse now than when the election was called.
In very guarded mode at his press conference in Canberra as Treasurer, Hockey and Finance Minister Senator Mathias Cormann said the budget numbers were deteriorating, but declined to give details.
Hockey said confidence is returning to the economy, but the government would face a challenge to sustain growth as the mining investment boom deflates - and hinted that it was looking at ways to stimulate infrastructure spending.
''Infrastructure investment that is based on proper cost-benefit analysis is good investment that helps to lift productivity growth,'' Hockey said.
Senator Cormann said the government already planned a net A$6 billion stimulus to infrastructure through its road-building programme, but would not say whether it was considering more.
Both ministers appeared to be under instructions to say as little as possible that strayed from the Coalition's script.
They blamed Labor repeatedly for the state of the budget, saying former Treasurer Wayne Swan had promised a surplus in 2012-13 more than 500 times, but instead delivered a deficit of A$18.8b.
The deficit was slightly less than the A$19.4b forecast in the May budget, mainly because company tax and the GST both came in a bit higher than expected. But Hockey said this improvement was not carrying through to 2013-14.
''The fact of the matter is, these are the Labor Party's numbers, their second last set of numbers, based on their second last budget'', he said.
''Please do not assume that these numbers are relevant to the state of the books that we have inherited.''
Since senior officials released the Pre-Election Economic and Fiscal Outlook in mid-August, he said, ''there has been a further deterioration in the budget. It's not a significant deterioration, but it is a deterioration''. He would not give details.
''We are carefully, methodically going through all the line items of the budget, and we will have more to say about the current state of play. It's been quite a revelation.''
Hockey flagged legislation in the first weeks of the new Parliament to increase Australia's gross debt limit above its present cap of A$300 billion, saying this was the result of Labor's'litany of failures'.
''I am advised that we will go extremely close to the debt limit of $300 billion before Christmas'', he said.
''Labor refused to deal with it. We will deal with it, and it will be Labor's limit, it will be what they left us with.''
Hockey declined to comment on the state of the economy, other than to say that confidence was returning to business and consumers, and he did not share fears of a bubble in housing prices.
He said rising house prices helped to make marginal property developments viable, and that would help to reduce Australia's shortage of housing supply.
Hockey and Senator Cormann gave no indication when they would release their own first budget document, the Mid-Year Economic and Fiscal Outlook, other than to say that it would be before the end of January.
Hockey hinted that it would set out the government's intended path back to surplus.
In Sydney, acting Opposition Leader and former Labor treasurer Chris Bowen said Hockey's statement was ''full of spin and misleading commentary''.
Bowen, who was briefly treasurer before Labor lost government, said Hockey had ignored the economic statement released just two days before the election was called.
He added there was ''not one dollar of difference'' between the economic statement and the figures released on Friday.
Bowen's predecessor, Labor treasurer Wayne Swan, had repeatedly promised to return a surplus in 2012/13. But he ditched the promise last December, due to declining government revenues.
Swan weighed into the budget debate on today, saying that "Mr Hockey needs to stop behaving like a childish politician and start behaving like a Treasurer".
"His performance today was misleading at best; and incredibly irresponsible and reckless at worst," Swan said in a statement.
- Sydney Morning Herald