Hockey and Cormann reveal budget deficit blow-out to $40.4b

The Federal Government has released its Mid-Year Economic Fiscal Outlook (MYEFO), announcing Australia's budget deficit would be almost $11 billion higher than expected for the current 2014-15 financial year.

The total combined deficit for the next four years has risen to a combined $103.9 billion, up from the May projection of $60.3 billion.

The deficit for the 2014-15 financial year has increased from $29 billion, as predicted in the May budget, to $40.4 billion.

The budget blowouts are forecast to continue for at least four years, falling to $11.5 billion in 2017-18 - more than eight billion above the May forecast.

The report blames the $43.7 billion deterioration on the impact of the economy on tax receipts and payments, as well as the Senate's handling of budget announcements in May.

"We are now witnessing the largest fall in the terms of trade since records were first kept in 1959," Treasurer Joe Hockey said.

The government's long path back to surplus assumes the Senate will pass the Coalition's budget measures.

More than $1 billion has been spent on national security, but to pay for that the government has slashed $3.7 billion from foreign aid - the single biggest cut in the budget update.

"Despite many challenges, the government has made a good start on budget repair," Mr Hockey said.

"There are many challenges but we are on the right track."

Mr Hockey and Finance Minister Mathias Cormann were due to hold a press conference on the budget update at 12.30pm, but released a press release this morning announcing it would be postponed "until further notice" due to the siege in Sydney.

Less than an hour later Prime Minister Tony Abbott said MYEFO would be released "shortly".

"I want to assure people that the ordinary business of Government must go on and it will go on and that's why Treasurer Hockey and Finance Minister Mathias Cormann will shortly be releasing the MYEFO as planned," he said.

A short time later the Treasurer's office confirmed the announcement would be held at 1.30pm.

BUDGET DEFICITS IN BILLIONS (VS MAY)

2014/15 - $40.4 ($29.8)

2015/16 - $31.2 ($17.1)

2016/17 - $20.8 ($10.6)

2017/18 - $11.5 ($2.8)

ECONOMIC FORECASTS 2014/15 (VS MAY)

GDP - 2.5 percent (2.5 percent)

Unemployment - 6.5 percent (6.25 percent)

CPI - 2.5 percent (2.25 percent)

Wages - 2.5 percent (3.0 percent)

(Source: Mid-Year Economic and Fiscal Outlook)