Treasurer Josh Frydenberg is expected to forecast a whopping deficit of about $200 billion for 2020/21 when he hands down his second budget next Tuesday, delayed from May because of the coronavirus pandemic.

Massive government spending on programs such as the JobKeeper wage subsidy to cushion business and workers from the impact of the pandemic and the first recession in nearly three decades has put paid to any lasting dream of a surplus.

"Reflecting another hit to revenue assumptions along with an extra $30 billion in stimulus the projected deficit for this year is likely to be around $230 billion," AMP Capital chief economist Shane Oliver predicts.

Deloitte Access Economics economist Chris Richardson is forecasting a deficit of $45 billion in 2021/22 and $26 billion in 2022/23.

He sees massive ongoing shortfalls in personal tax revenue.

"There'll be fewer jobs, and wages will be lower too. Small business profits will be down as well, as will income from rent, dividends and interest," he said.

Laying out his budget strategy in a recent speech, the treasurer said it was no longer prudent to pursue surpluses in the face of the COVID-19 pandemic.

"It would now be damaging to the economy and unrealistic to target surpluses," he said.

Instead, the government is promising to spend to create jobs, encourage investment and stimulate the economy, while continuing to provide temporary support measures until the jobless rate is comfortably back under six per cent.

""We do not expect the government to forecast an unemployment rate below six per cent until 2022/23," Commonwealth Bank head of Australian economics Gareth Aird said.

Aside from undertaking the necessary fiscal stimulus to support the recovery, National Australia Bank economist Tapas Strickland will also be judging the budget on whether the government takes the opportunity for reform.

"The lack of genuine structural reform has been an unfortunate feature of budgets of all political stripes in recent years," he said.

The government has flagged the possibility of bringing forward already legislated tax cuts scheduled for 2022/23.

There is also the expectation of an investment tax allowance for business and the prospect of additional infrastructure spending.

The government could provide a "JobStart" subsidy to encourage small and medium sized businesses to take on staff.

Among a host of initiatives announced by the government so far, there have been millions of dollars showered on the regions, aviation and the digital economy.

The budget will contain Treasury's updated economic forecasts.

In a special economic and fiscal outlook released in July, it expected annual economic growth to decline by 2.5 per cent in 2020/21, a prediction made before confirmation Australia had posted a seven per cent contraction in the June quarter.

It was the largest quarterly fall since records began in 1959 and confirmed Australia was in its first recession since the early 1990s.

But Mr Frydenberg has made a big promise.

"The 2020/21 budget ... will deal with a recession like no other in living memory," he said.

Australian Associated Press