The Albanese government will use the summer to work up new policies to woo voters, while trying not to worsen the budget position any further than the deteriorating outlook exposed in the mid-year update.

The Mid-Year Economic and Fiscal Outlook released on Wednesday shows the federal budget is not estimated to return to surplus for at least a decade, with spending at near record levels, debt about to surpass $1 trillion, and cumulative deficits over the next four years almost $22 billion larger than forecast in May.