Tens of billions of dollars are expected to have been wiped off the deficits for the next four years as a result of a rebounding economy when the treasurer hands down the midyear economic and fiscal outlook on Thursday.

It could prove to be his last major economic showcase before the federal election should Prime Minister Scott Morrison call a vote for March, as some pundits are speculating.

However, the 2022/23 budget has been pencilled in for March 29 from the traditional second Tuesday in May to accommodate an election being held in May.

The midyear review is unlikely to contain any major policies, being largely a “bookkeeping exercise”, as Westpac economists put it.

However, that hasn’t stopped the usual speculation of what it might or might not contain beyond updates to the budget position and economic forecasts.

Westpac expects at some stage the treasurer will need to extend the low and middle income tax offset for another year to 2022/23.

Otherwise, he will be seen effectively raising taxes in an election year before the so-called stage three tax cuts come into play in 2023/24.

But tax experts aren’t getting their hopes up that either of the main political parties will be promising sweeping changes heading to the election, despite major tax reform being long overdue.

“We agree with the IMF’s recent report that calls for real reform of the tax system in Australia,” BDO tax partner Mark Molesworth told AAP.

“We cannot continue to expect a 20th century tax system to serve us well into the third decade of the 21st century.”

That won’t stop the treasurer bragging about the tax “reforms” his government has undertaken, when in reality they are just tweaks to the tax system.

Still, signs of a marked economic recovery from the setback of the Delta variant of the coronavirus, which forced half the population into lockdown, are expected to see budget deficits cut back.

Avid budget watcher Chris Richardson from Deloitte Access Economics expects deficits will have improved by $103 billion over the four-year budget estimates.

This would see the 2021/22 budget deficit reduced to $91.1 billion from $106.6 billion forecast at the time May budget and $61.8 billion in 2022/23 rather than $99.3 billion.

RBC Capital Markets chief economist Su-Lin Ong expects as Treasury is likely to upgrade its economic growth and cut its 2021/22 unemployment rate to below five per cent, it could see the deficit reduced to $70 billion or even $60 billion.

She notes that revenues are already running $20 billion ahead of forecast in the four months to October and only partly offset by additional government spending during the recent lockdowns.

“We are reluctant to put much weight on forecasts much past the next year. This is especially the case as we move closer to a federal election,” Ms Ong said.

However, ANZ economists do not expect the treasurer to use this improvement in the update to switch to phase two of his fiscal strategy, which is about budget repair.

“We think the government will want to see the unemployment rate remain comfortably below five per cent before starting phase two,” ANZ says

Westpac economists expect Treasury will cut its unemployment forecast for 2021/22 to 4.75 per cent from its five per cent prediction made in May.

For 2022/23 they expect the forecast will be cut to 4.25 per cent from 4.75 per cent.