The Budget will put the Government on track for a current account surplus of $50 million by 2026, the Premier promised.

Mr Burt, also the finance minister, said that Government had at first planned to limit current account expenditure for the next year to just $896 million, but had upped the figure by $49 million to $945 million.

He explained: “When examining what $896 million represented, it became clear that there would have been redundancies in the police, fire and prison services and throughout many critical government departments.

“In addition, it would have required severe cuts to the social services that protect the vulnerable in our community and provide support to our seniors.”

He warned that the updated estimate of $945 million would “still require a significant amount of reductions in services to meet that target”.

Mr Burt said: “The reductions can be seen across the board where grants have been reduced in certain areas, services will have to be limited and hiring will be frozen.

“This $945 million is an accurate baseline for future current account spending, but it will still require significant spending discipline to ensure that this target can be met.”

Mr Burt said government revenue for the 2022-23 financial year was estimated to hit $1.08 billion – an increase of $79 million on the previous year.

Expenditure is estimated to be $945 million, up $57 million on last year.

Mr Burt said that would leave a current account surplus of $132.7 million.

But the Government will have to use most of it – $130 million – to cover interest payments on the country’s debt.

The bottom line on this year’s balance sheet will tumble into the red by $70 million after $73 million is spent on capital projects such as essential upgrades to the Tynes Bay waste treatment centre.

Mr Burt claimed that, if not for the capital expenditure work, the Government had mapped out a way to live within its means for the year.

He said: “This year’s Budget, with a current account surplus of $132.7 million, indicates that, according to projections, the Government will generate sufficient revenue to cover not only the day-to-day running of government but also interest costs – a major financial milestone as we restore public finances.“

Mr Burt admitted that a return to a balanced Budget had been delayed by a year, but insisted that the Government was still on course to reach the target.

He said: “I am sure the Opposition, who will look to the increased spending and deficit this year, and the one-year delay to the return to a balanced budget, as reasons to criticise this Government’s fiscal management.

“However, I promised at the beginning of this statement that I would be realistic with where we are financially.”

He insisted that government programmes such as the economic recovery plan and reforms to healthcare and education still needed to be funded.

He added that a “full economic recovery“ would not be achieved until the Fairmont Southampton hotel was back in business.

Mr Burt added that the Government remained committed to a long-term goal of a Budget surplus.

He said that revenues were predicted to grow by between three and five per cent a year over the next four years – mostly through tax reform and economic growth.

Mr Burt claimed that expenditure was expected to rise by no more than 1.5 per cent in the same time period.

He said: “This glide path will meet the target of having a $50 million surplus in the fiscal year 2026-27.”