“Today’s economic statement claims the government is on track to achieve a modest surplus within the forward estimates,” Business Council of Australia Chief Executive Jennifer Westacott said.

“Let’s be clear, the government’s fiscal strategy is not on track,” Ms Westacott said.

“A credible and believable fiscal strategy requires a concerted effort to fundamentally change the cost structure of government spending – by permanently changing programs or getting rid of expenditure items. There is little or no evidence of this in the economic statement. In fact performance against the cap on real spending growth has deteriorated.

“In our response to the federal budget barely 10 weeks ago in May, the BCA stated that there was no reason to believe the government’s projected return to surplus was any more deliverable than the promise that we would be back in surplus this year.

“We also raised concerns about the achievability of the forecasts and the failure to address the lack of confidence in the economy.

“We have now had confirmed in the economic statement that the forecasts were too optimistic – and yet at the same time a number of new policy measures have been introduced which have the potential to erode already fragile levels of confidence.

“The economic statement has seen a continuation of the muddle through approach characterised by ad hoc and rushed proposals that simply hasn’t worked in the past. The measures announced will do little to rebuild confidence.

“At this time Australia needs strong leadership and comprehensive and strategy to deal with our looming economic and fiscal challenges. As outlined in the BCA’s Action Plan for Enduring Prosperity released earlier this week this includes a comprehensive audit on the size, scope and efficiency of government. 

“An efficiency dividend is not a credible way to make nearly $2 billion in savings over the forward estimates because it is not changing the structural approach to government spending, nor is it allowing the community to see how priorities have been reordered.

“Both sides of politics need to outline a convincing fiscal strategy that is underpinned by a credible path back to surplus. If they don’t then the budget and Australia’s future prosperity will remain exposed,” she said.