budget hole could deepen to $80 billion

THE fall-off in government revenue could hit $80 billion over the next four years, analysis by the Australian Financial Review shows.

The government says the coming budget will take at least a $12 billion hit to revenue from last October's predictions.

But the Financial Review reported on Tuesday that the write-down in tax collection for the current financial year was more likely to be $17 billion.

This would drop further to at least $20 billion in 2013/14.

The total revenue write-down over the four years to 2016/17 would be between $60 billion and $80 billion, the newspaper said.

The government has flagged a drop in company tax collections since the global financial crisis as the main reason for the fall in revenue.

Treasurer Wayne Swan will reveal the state of the economy in the budget on May 14.

Finance Minister Penny Wong confirmed the revenue drop for the current financial year "looks to be in the order of $17 billion".

She also said the government wouldn't be increasing the rate of the Family Tax Benefit Part A, which it had promised as part of the mining tax package.

"This is a difficult decision but a responsible decision given what's happened to revenue," she told Sky News on Tuesday.

She said this was not a cut to family payments since no one had actually received the extra money yet.

In last year's budget, the government promised to lift the payment to as much as $300 a year for families with one child and $600 for those with two or more children.

But it hasn't yet legislated for the change.

The $1.8 billion family tax payment boost was promoted by Labor as "spreading the benefits of the mining boom".

"If the benefits of the boom are lower than otherwise would have been expected through ... declining commodity prices and a stubbornly high Australian dollar, then you need to adjust," Trade Minister Craig Emerson told Sky News.

Shadow Treasurer Joe Hockey took to Twitter to point out the ever-declining revenue forecasts.

"Wong says revenue write downs now $17bn. Last week Gillard said $12bn. Week before Swan said $7bn. Budget in complete chaos!!" he wrote.

Dr Emerson said playing politics on Twitter ignored the reality of the country's economic dilemma.

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