Government cuts to procurement will not bring Australia out of deficit: experts

Economic experts have claimed that the Australian Treasury will have to slash government programmes rather than cut administration costs to help save the budget surplus.

Former Finance Department official Stephen Bartos and Deloitte Access Economics director Chris Richardson said the usual hikes to efficiency dividend hits and cuts to public-sector contracting and procurement were not going to yield the savings needed to lift the budget out of deficit in 2012-13.

"If the likely drop in revenue is as great as foreshadowed, it isn't going to fill the gap," Bartos said.

A new Deloitte Access Economics budget review has forecast a deficit of $1.9 billion for next financial year, well short of Treasury's predicted $3.5bn surplus for 2012-13.

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