Joe Hockey's $25b iron ore budget hit

Phillip Coorey and Laura Tingle

Updated Apr 13, 2015 – 5.32am, first published at 12.15am

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Treasurer Joe Hockey has warned the deficit could blow out again as he prepares to write-off up to $25 billion more in revenue over the next four years by factoring in an iron ore price as low as $35-a-tonne in the May 12 budget.

The price, $US25 lower than what was said to be a conservative forecast of $US60 contained in December's budget update, will mean there is about $6.25 billion less revenue a year than the government thought it had just five months ago.

Phillip Coorey is the political editor based in Canberra. He is a two-time winner of the Paul Lyneham award for press gallery excellence.

Laura Tingle is The Australian Financial Review's former political editor. She is now chief political correspondent for the ABC's 7.30 program.