Overall economic growth forecasts have been cut from 2.75 per cent to 2.25 per cent for this year,while Treasury remains optimistic it will return to trend levels by 2022-23.

Persistently low levels of retail spending mean the states and territories will bear some of the pain. GST revenues are expected to be $1.8 billion lower this year and $10 billion over the forward estimates.

In a sign of the soft economy,car tariff revenues have been cut by five per cent this year and next. The government has taken a $700 million company tax hit this year and $2.8 billion in 2020-21.

Amid fears of an economic downturn,tumbling global interest rates have helped the government. The interest bill has been shaved by $446 million this year and $3.8 billion over the next four despite the government holding more debt.

On the revenue front,the government has shelved plans to proceed with a biosecurity levy after consulting with industry – costing it $384 million over the next four years. At the same time it will save $467 million through a public service efficiency dividend.

Drought and aged care were the two main spending programs in Monday's update. The government’s interim response to the aged care royal commission will cost $623 million over four years while $1.3 billion will be spent on drought relief.

The urban congestion fund,which will deliver short-term projects like commuter car parks,has had a $210 million boost on top of greater infrastructure spending of $4.2 billion over the next four years.

"Despite increased expenditure on those high priority areas and significant revenue write-downs,we remain on track to return to surplus and remain in surplus as we continue to control expenditure growth,"said Senator Cormann.

Mr Frydenberg also used Monday's update to announce a delay in the release of the next Intergenerational Report.

The report,which by law must be delivered five years after the previous one,will now not be handed down until July 2020. That will be after the next budget and following the findings of the Retirement Income Review.