The Australian business community is warning the federal government against delivering budget surpluses based on short-term economic factors, without backing them up with lasting budget repair.
In a submission ahead of the government's April 2 budget, the Australian Chamber of Commerce has welcomed the coalition's ambition to deliver surpluses from mid-2020.
The government has forecast a $4.1 billion budget surplus in 2019/20, followed by bigger surpluses throughout the next decade.
But the chamber says they must come with budget repair, as government spending levels remain higher than before the Global Financial Crisis.
"Concerns remain that this improvement has largely been driven by higher than expected revenues resulting from short-term economic factors," the business lobby group states.
"Any delivered surplus, absent of further budget repair that addresses structural challenges to the Commonwealth's finances, risks being over-reliant on favourable resource prices, debt accumulation, wages growth and bracket creep."
Capping government spending at 24.7 per cent of gross domestic product and finding savings in larger areas of spending such as defence and health are among initiatives the group has recommended to keep the cash the government is splashing at bay.
The next budget should also be focused on improving productivity and other policies that will boost economic activity, ACCI's submission states.
That includes well-thought-out infrastructure and workplace regulation reform.
Specific policies the business group wants to see include setting the permanent migration cap at 190,000 for the year ahead, rather than the government's proposed 160,000.
Meanwhile, CommSec estimated the rolling annual budget deficit to December 2018 stood at $1.569 billion and could move into surplus as early as March.
The result comes on the back of record company profits, a strong jobs market, solid revenue flows and government spending growing slower than expected.
However, CommSec chief economist Craig James said there was a risk both sides of parliament would lift spending ahead of the election due in May, slowing the progress towards a surplus.
