The hopes of Wayne Swan and Troy Buswell delivering Budget surpluses are under more threat, with new figures showing stubbornly high costs and poor GST collections.
Figures from the Finance Department for the Federal Budget's performance through July and August show it is already about $400 million behind on delivering the Treasurer's forecast $1.1 billion surplus for the 2012-13 financial year.
The overall Budget is predicated on a 10.5 per cent lift in revenues, driven by the carbon tax and a general improvement in the economy and a 0.7 per cent fall in total expenses.
However, the first two months of the financial year show that while revenues are generally in line with expectations, total expenses have grown.
Income tax collections from workers and company tax collections are well ahead of expectations in a sign the jobs market is holding up.
But costs, particularly in the social security and health areas, have climbed sharply above expectations.
Interest on government debt, despite globally low interest rates, is more than 6 per cent higher.
Over the full year, interest costs are supposed to climb just 3.3 per cent.
CommSec chief equities economist Craig James said the underlying deficit over the 12 months to the end of August was $41.1 billion.
Though an improvement over the deficit of $43.7 billion for the full 2011-12 financial year, there had to be a strong, sustained turnaround in total finances for the Budget to get back into the black.
Of even more concern for WA Treasurer Mr Buswell, GST receipts - which flow to the States and Territories - are down more than 4 per cent.
Premier Colin Barnett has promised not to deliver a Budget deficit, with this year supposed to deliver a $196 million surplus.
But the sharp drop in iron ore prices in July and August, accompanied by a stubbornly high Australian dollar, is threatening to blow the surplus pledge away.