OPPOSITION Leader Tony Abbott says the federal government has a problem with spending rather than revenues, predicting budget deficits stretching out "as far as the eye can see".
Treasurer Wayne Swan revealed on Sunday government revenues would be about $7.5 billion less than forecast at the time of the mid-year budget review released in October.
But Mr Abbott said revenues were $70 billion higher than in the last year of the Howard coalition government, while expenditure was $100 billion higher.
"We certainly have a big budgetary problem," Mr Abbott told reporters in Perth.
"This is a government that can't keep its spending under control."
The Grattan Institute has warned Australia must prepare for more difficult economic times ahead by reducing its overall budget deficit.
The think tank, in a new report, says that Australia faced a "significant risk" of posting deficits of around four per cent of gross domestic product over the next 10 years, requiring governments to find savings measures and tax increases of $60 billion a year.
"What we need is a government which gets expenditure under control ... under this government there are deficits stretching out as far as the eye can see," Mr Abbott said.
"We can't wave a magic wand and solve all the problems that this bad government has created overnight, but surpluses are in our DNA."
He reeled off a number of initiatives proposed by the coalition, including stopping asylum seeker boats, which currently cost taxpayers $6.5 billion of "unnecessary spending".
Mr Abbott reaffirmed the coalition would scrap the school kids bonus and "slim" the public service, and said its version of the national broadbank network was $60 billion cheaper.
He also said there would be a modest reduction in company tax, although the precise amount and timing would be revealed closer to the election.
The coalition would stick with its version of the paid parental leave scheme, funded by a modest levy on larger businesses.
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