PEFO casts doubt on tax cut: Labor

The latest Treasury update has cast doubt on whether the federal government can deliver a promised tax cut for people earning over $80,000 by July 1, the opposition says.

Shadow Treasurer Chris Bowen has highlighted comments in the Pre-Election Fiscal Outlook (PEFO), released on Friday, that the cuts may not be delivered in time for the upcoming tax period at the end of the financial year.

"The dysfunction of having a budget then, less than three weeks later, the secretary of the department is reporting a key measure might not be delivered, says it all," Mr Bowen told reporters on Friday.

"Now we know the government had not done the due diligence, not done the key work to ensure personal income tax cuts could be delivered on 1 July as promised."

The report said the tax commissioner had indicated middle-income tax cuts outlined in the budget would need to be passed by parliament before the change could be incorporated into the income tax withholding schedules.

Labor has indicated its support for the measure.

The report shows the budget deficit forecast remains at $37.1 billion for 2016/17, confirming the government has not followed through on promises to reduce the nation's debt, Mr Bowen said.

He said debt levels are around $100 billion higher than the last PEFO in 2013.

"Here you have the secretary warning that if non-mining investment continues to bump along as it has under this government, then GDP growth will be hit," Mr Bowen said.

Finance Minister Mathias Cormann insists the tax cuts will be delivered "in full as promised".

The cuts can be legislated after July 2016 given Australians won't put in returns until later in the year, he said.

"That is incidentally and entirely consistent with the way the previous Labor government legislated for these sorts of measures in the past," he told reporters in Canberra on Friday.