The 2013 budget has revealed the extent of the damage to Tasmania's bottom line reaped by worse-than-anticipated revenue falls.

The government has posted a record-high $426 million deficit in 2012-13 - $143 million worse than forecast in last year's budget - and will not return to the black until 2017. 

Handing down her third, and possibly final, budget yesterday, Ms Giddings said it would have been irresponsible to impose even tougher savings targets at a critical point for the economy. 

``To cut harder and faster or to increase the tax burden at this time would have unacceptable impact on services and risk setting back the recovery we're seeing in the economy and thereby damage our state finances,'' Ms Giddings said. 

Instead, the government will allow net debt to blow out to $229 million by 2014-15, but Ms Giddings said that was still the lowest level of all the states.

The bleak stack of figures has left the government with no cash to splash before the March election.

An increase in the tax-free threshold from $1 million to $1.25 million that is expected to benefit about 2250 small businesses is one of the few initiatives contained in a bland budget. 

Ms Giddings talked up major reforms to education and disability funding, allocating $38 million to the Gonski reforms and $16 million to the rollout of the National Disability Insurance Scheme over the next four years.

The bulk of the cost burden of these reforms will not be felt until beyond the forward estimates.  

There was also some good news for police with $32 million reinjected to maintain front-line numbers at 1120. 

On top of $100 million less in GST receipts, $200 million in state tax returns has been wiped from the state's revenue over the forward estimates. 

A massive write-down in dividends collected from the state's three energy companies has cost the state more than $400 million over the next four years due to the selloff of Aurora Energy and changes to the carbon tax lowering Hydro Tasmania's projected profits. 

With a federal election just four months away, Ms Giddings said a Tony Abbott-led federal government, promising to cut the carbon tax and considering a change to GST distribution, was the biggest threat to the state's chances of returning to surplus. 

Greens leader Nick McKim said the ``gradual greening up'' of the budget was continuing. 

He highlighted feasibility studies into a state-based container deposit scheme and a mine remediation and innovation centre of excellence as wins for Greens policies. 

State Opposition Leader Will Hodgman described the budget as a train wreck. 

``It has delivered record deficits, higher debt, less jobs, and a recession,'' Mr Hodgman said.