Economists expect the government's fortuitous run of ultra-positive budget revisions to end in the Mid-Year Economic and Fiscal Outlook, likely to be revealed mid-week.
Since the October 2022 budget, treasury has increased its projected tax take by more than $365 billion due to a mix of higher commodity prices, wages growth, population growth and inflation.
Higher commodity prices have helped to fill government coffers. (Alan Porritt/AAP PHOTOS)
Westpac senior economist Pat Bustamante still predicts a better-than-expected budget position to be revealed in the mid-year update, but nowhere near as auspicious as previous years.
"We have long flagged that the budget sweet spot could not last forever, and we have now seen the sugar-rush fade," he said.
Wages growth and inflation have moderated significantly, resulting in lower growth in collections of income tax and indirect taxes such as GST.
Mr Bustamante expects the update to show a $4.1 billion upgrade in the budget position for the current financial year, before revisions turn negative in the following three years.
In total, the bottom line is expected to deteriorate by $4.7 billion over the four years.
With tax takes going down and growing spending on items like subsidised childcare and energy rebates, government borrowing will blow out to cover rising deficits.
As a result, total government borrowing - including from state and local levels - is expected to jump from 3.2 per cent of nominal GDP last financial year to 6.0 per cent this year and 6.25 per cent in 2025-26.
That's broadly in line with the GFC, greater than the 1990s recession and only surpassed by government borrowing during the pandemic, Mr Bustamante notes.
This matters because more debt acquired in good economic times leaves less room for stimulus when times get tough.
"Growing geopolitical uncertainty, an increasing chance of trade wars and ongoing technological change may mean shocks become more frequent," Mr Bustamante said.
"If they occur when the public balance sheet is already stretched, we would really be heading into uncharted waters."
Anthony Albanese could be tempted to go to the polls early in the new year. (Russell Freeman/AAP PHOTOS)
The next federal budget is pencilled in for March 2025, assuming the Albanese government resists the temptation to call an early election before then.
Other items of interest for economy watchers include purchasing managers' indexes on Monday and the Westpac consumer confidence index on Tuesday.
In November, consumer sentiment rose to its highest level since April 2022 and could continue to rise as the Reserve Bank of Australia moves closer to a first interest rate cut, widely tipped for the first half of 2025.
Local markets will react to a subdued close to the week on Wall Street as investors await the Federal Reserve's next meeting.
The Dow Jones Industrial Average fell 86.06 points, or 0.20 per cent, to 43,828.06, the S&P 500 lost 0.16 point, or 0.00 per cent, to 6,051.09 and the Nasdaq Composite gained 23.88 points, or 0.12 per cent, to 19,926.72.
Australian share futures fell 42 points, or 0.5 per cent, to 8269.
The benchmark S&P/AS200 index on Friday dropped 34.3 points, or 0.41 per cent, to 8,296, while the broader All Ordinaries fell 36.6 points, or 0.43 per cent, to 8,550.3.
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