Australia's 2014-15 federal budget faces a massive deficit of up to 4 billion U.S. dollars, according to a top-level economics report released on Monday.
In its Mid-Year Economic and Fiscal Outlook (MYEFO) report, Deloitte Access Economics revealed that Australia's recent federal budget risks blowing out to 29.4 billion U.S. dollars, a total of 4.1 billion U.S. dollars more than was anticipated by treasurer Joe Hockey in May.
Economist Chris Richardson said the budget, which is currently gridlocked in the Senate, is "well and truly toast" and that falling commodity prices, slow wage growth and limited savings measures were to blame.
"We have big deficits that are not going to go away unless ' political Australia' manages to reach some compromise around this, " Richardson said on Monday morning.
"Both sides of politics did too much off the back of the temporary boom. We need to have a Senate that comprises its way to something better, otherwise this budget problem is not going to go away."
Both the Coalition and the Labor party have traded blows since Deloitte released its figures.
Deputy Coalition leader Julie Bishop suggested the government had inherited the problem when they gained power in 2013.
"We're begging Labor to take some responsibility for leaving us with the worst set of financial accounts of any incoming government in Australia's history," she told the ABC on Monday morning.
However, the Opposition's finance spokesperson, Tony Burke, urged Hockey to take responsibility.
"The moment he arrived, he doubled the deficit," Burke said on Monday. "Now we're seeing it continue to blow out."
"Joe Hockey has to acknowledge that a large part of this blowout rests entirely at his feet."
In total, deficits are expected to be around 8.5 billion U.S. dollars larger than they have been in each of the last three years.