Australian Treasurer Joe Hockey has announced its Mid-Year Economic and Fiscal Outlook (MYEFO) in Canberra on Tuesday, forecasting a 47 billion AU dollars (almost $42.06 billion) deficit in 2013-14, and 123 billion AU dollars worth of cumulative deficits over the forward estimates.

Speaking in the National Press Club in Canberra, he confirmed that the budget would not return to surplus within the 10-year medium-term projections. "During this time, gross debt on issue is projected to increase to 667 billion AU dollars," he said.

According to Hockey, the budget position since the Pre-Election Economic and Fiscal Outlook of the Labor government, released on August 13, has deteriorated by 68 billion AU dollars over the forward estimates.

And the MYEFO also showed that the role and scope of government and the efficiency of government spending in the coming years will be guided by three principles: the government should live within its means; have respect for taxpayers in the care with which it spends every dollar; and do for people what they cannot do, or cannot do for themselves.

According to the figures from him, more than half the deterioration in the budget position is due to the softer economy.

Real GDP growth is forecast to be 2 percent in 2013-14, unchanged from the Pre-Election Economic and Fiscal Outlook.

"This reflects a sharper-than-forecast fall in resources investment and a slower recovery in the non-resources sectors," he said.

And downward revisions to nominal GDP -- caused by soft growth in wages and prices as well as the downgrade to real GDP growth -- has flowed straight through to the government's revenue base and driven a write-down of tax receipts of around 37 billion AU dollars over the forward estimates. And a softer economy has also impacted on the payments side of the budget.

Hockey confirmed that the government is dealing with a number of legacy issues inherited from the former government. These issues include that Reserve Bank Reserve Fund, unlegislated tax and superannuation measures, a shortfall in funding for offshore processing of asylum seekers, the funding for schools in Western Australia, Northern Territory and Queensland and so on.

And he also emphasized Tuesday that the budget the Coalition government has inherited is simply "unsustainable." He said that the government must undertake the necessary reforms and help create the right environment for the economy to get back on track and support growth.

"Today's MYEFO draws a line in the sand after six years of economic and budget mismanagement from Labor. We know that fixing the budget is not a short-term task. However, our plan will restore the budget and build a prosperous economy," Hockey added.