The federal budget’s forecast deficits will worsen by more than $100 billion over the next decade if the government is unable to pass the measures from 2014’s budget that are still stuck in the Senate.

The forecasts contained in May’s federal budget do not predict a surplus until 2020 at the earliest, but this assumes the passage of the measures that are still stuck from 2014. The Parliamentary Budget Office has calculated these to be worth $102.2 billion to the bottom line between 2015-16 and 2025-26.

The single largest unresolved measure is the plan to reintroduce the twice-yearly indexation of petrol excise to inflation, which the PBO estimates to be worth $22 billion over the decade if the government can secure the legislation.

As The Australian Financial Review revealed on Friday, the new Greens leader Richard Di Natale is negotiating with the Abbott government on a deal that would dedicate a portion of the proceeds to a public transport fund.

A government source confirmed the negotiations were under way and the government was “very serious” about reaching an agreement.

“The government and Senator Di Natale are prepared to deal with this issue. We are very keen to do a deal,” he said.

In an attempt to secure the support of former Greens leader Christine Milne, the government dropped a condition that would allocate the revenue directly towards roads but Senator Milne still refused to negotiate.

The prospect of a deal with Senator Di Natale concerned the Australian Automobile Association, which said fuel excise should fund roads.

“Motorists will next year pay $15.2 billion in fuel excise and only $5.9 billion of this is slated to come back to fund road projects,” AAA chief executive Michael Bradley said.

“The government has taken great pride in its abolition of a carbon tax that excluded petrol, but motorists will not thank the government for any deal with the Greens that exclusively forces motorists to pay the carbon tax of the future every time they fill up the car,” Mr Bradley said.

Labor also opposes the fuel tax increase and Opposition Leader Bill Shorten accused Tony Abbott of breaking two promises – not to increase taxes and not to do any deals with the Greens.

“He’s got the daily double today, hasn’t he? Up go the taxes of all motorists and a deal with the Greens,” Mr Shorten said.

Shadow treasurer Chris Bowen said the measures were “loaded with unfairness” and Labor would not be swayed.

He said the government’s preparedness to increase tax on petrol made a mockery of the opposition’s plans to curb tax concessions at the top end of superannuation.

The PBO costings also list the cuts to the Family Tax Benefits, which tally more than $30 billion over a decade, but which the government wants to spend now on a boosted childcare system rather than pay down the deficit.

Senator Di Natale said the Greens would not be passing these family tax benefit cuts either but he reiterated his pledge to pass pension cuts renegotiated by Social Services Minister Scott Morrison, as long as the government reversed its decision to dump an inquiry into retirement incomes.

Extracted in full from the Australian Financial Review.

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