One of Australia's top economists says the federal government deficit should be capped at 1 per cent of gross domestic product in any year, except during emergencies.
ANZ chief economist Warren Hogan has suggested overhauling the Charter of Budget Honesty - which loosely requires the government to balance its budget "over an economic cycle" - because it is not strict enough to encourage serious fiscal discipline.
Mr Hogan says the Coalition will face some tough budgetary decisions in coming months, but questioned if the new government would be disciplined enough to rein in spending.
His comments come as prime minister-elect Tony Abbott prepares his frontbench for government, including Joe Hockey as Treasurer and Mathias Cormann as Finance Minister.
The Coalition's finance team heavily criticised the Gillard and Rudd governments for their fiscal profligacy and ill-discipline in the lead-up to the election.
Mr Hogan said the charter was drawn up in different economic times when government revenue was more predictable. Its principle suggests governments can run deficits in bad times as long as they generate surpluses in good times.
"We set up the charter in the mid-1990s on the back of independent monetary policy ... [and] it was a good progression," Mr Hogan said.
"[But] the concept ... that you keep the budget balanced over the course of the economic cycle is just too loose for politicians ... and no one's holding them to account."
Mr Hogan, who was speaking at an Australian Business Economists lunch in Sydney, said Australia needed to define more strictly what the government could do with its budget.
"That is, they have to stick between 1 per cent of GDP either side every year on their operating position," he said.
"We've got to keep that operating position tight ... because we're going to find that we've got a bit of a problem with our budget."
But David Plank, Deutsche Bank's head of fixed income and credit research, questioned the Abbott government's spending promises, and criticised its plan to cut the corporate tax rate.
"One of the last things I would want to do is cut company tax," Mr Plank said.
"A company tax cut is effectively a tax cut to foreigners, given the way we allow our tax imputation system to work," he said.
Stephen Halmarick, chief economist of Colonial First State, backed suggestions the government ought to face stricter spending protocols.