The government has announced tens of billions worth of policies which have been matched by the opposition in the lead up to the hotly contested election.

At least $8.5b for Medicare, $7.2b for Queensland’s Bruce Highway, $690m to cap some PBS medicines at $25 per script, $1.8b for energy rebates and many more cash splashes have been promised by both major parties.

It comes ahead of Tuesday’s budget where Treasurer Jim Chalmers is expected to hand down the first of a decade of deficits with almost a trillion dollars in total debt.

Judo Bank’s chief economist Warren Hogan has long voiced his concerns about massive government spending and its effect on the wider economy.

Mr Hogan told Sky News’s Business Weekend the government had failed to make tough decisions which would delivered a stronger outcome for the economy after the post-pandemic inflation surge crippled household budgets.

“I believe this economy has changed fundamentally in the last five years and I also believe that the government and many others do not understand that,” he said.

“We're seeing things like this big government increase to provide cost of living support. You don't spend money to deal with inflation - you raise interest rates. We don't want to have a recession? Well, is a mild recession now better than a bad recession?

“We're not making the tough decisions. We're trying to get through as easily as possible.”

He continued to warn the nation could crumple under the pressures of a steep economic downturn if budgets continue to dive into the red.

“The reality is, I think we are on a pathway to an economic crisis at the moment. Whether that’s a severe recession and what the dimensions of it (are), I don’t know,” Mr Hogan said.

He pointed to rising business costs that continue to shoot up despite consumer inflation falling back in the RBA’s target range.

“What's happening now is (businesses are) not passing on their costs because the consumer has been soft for the last 18 months, but their profitability is disappearing and of course they're going to stop investing and some of them are failing,” Mr Hogan said.

His warning was echoed by the Council of Small Business Organisations Australia (COSBOA) which has called for a budget which prioritises small business as a “failure to act will put Australia’s economic engine at risk of stalling”.

Slashing red tape, action on tax reform and greater support for employers struggling with costs and regulatory pressures are all on the agenda for COSBOA as it makes its plea to Labor.

“A small business-led recovery is the only way to strengthen the economy, create jobs, and ensure Australia remains globally competitive,” COSBOA CEO Luke Achterstraat said.

“But right now, small businesses are running on empty. If the Federal Budget fails to deliver real support, we risk seeing more closures, higher prices, and a weaker economy for everyone.”

Other concerns about the budget come from EY’s Cherelle Murphy who called for discipline in the coming budget as “inflation risks” persist.

She said that while politicians prioritise cost of living which continues to plague households despite inflation reducing to a “reasonable” level, this is “not Australia’s only challenge”.

EY’s budget list wish includes not adding to spending unless it has been offset elsewhere, changing policy to lower spending, finding new revenue that will persist over time and bringing in reforms to assist the private sector to maximise productivity growth.

Ms Murphy raised concerns about the forecasted deficits despite the economy being forecasted to continue growing with relatively low unemployment, high commodity prices and a competitive Australian dollar.

“The Treasurer has noted that even though there will be (smallish) revenue upgrades in the Budget and some of the election promises had already been provisioned for, fiscal deficits are to be expected for some years,” Ms Murphy said.

“This means current policy settings will cause our debt burden to grow even if we avoid bad times, and if we don’t, there is no fiscal buffer to deal with downside scenarios, which means the debt and interest burden grow further.”

The EY economist’s comments come as many will turn to the “Reconciliation of general government sector underlying cash balance estimates” in the budget, which breaks down the changes in spending and tax revenue since the previous budget.

Sky News’ Business Editor Ross Greenwood pointed to last year’s table which showed government spending impacted the budget by $9.5b.

“The effects of that spending go on into the future years,” Greenwood told SkyNews.com.au.

“It also contributes to the blow-out in the bottom-line deficit … and the $112 billion in extra debt from those deficits in the next four years.”

Greenwood then directed his sights at Treasurer Jim Chalmers who he said would highlight other aspects of Labor’s budget when delivering his speech on Tuesday night.

“The Treasurer – being a politician about to confront an election – will not mention this, though he is already using Donald Trump as a reason for disruption to the Budget - as he has used Cyclone Alfred, the Ukraine war and the end of Covid as reasons in the past,” Mr Chalmers said.

“This is not to say the Treasurer is doing anything any of his predecessors have or haven’t done in the past. It’s just a reminder that he too is a politician.

“Bottom line of this government … it is a big spending, big taxing Government that has learned – from the past – that austerity in Australia does not make for good politics.”

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