Ahead of today's Mid-Year Financial Report, Premier Lara Giddings revealed higher than expected income from state taxes would offset the cost of the government's $50 million extra spending commitments made since the May budget.

Ms Giddings yesterday warned the state's bottom line would be hit by a $150 million drop in Hydro Tasmania's returns to state coffers due to the Coalition government's plans to scrap the carbon tax.

Another $76 million will be wiped from GST receipts over the forward estimates. Ms Giddings has ruled out making any major budget cuts, but the shrinking revenues have curtailed Labor's promises to $21 million so far.

"Naturally we will look as you do each and every year for additional savings that you can find in areas where there is some flexibility like travel, like cars, like consultancies, those sorts of areas," Ms Giddings said yesterday.

"But the reality is what we have on the other side here is the Liberal Party promising reckless spending of over $386 million of money that doesn't exist."

The Liberals will update their alternate budget taking into account Treasury's new figures but are standing by a commitment to find more than $500 million in savings to pay for their election commitments and still produce a better budget bottom line than Labor.

Opposition treasury spokesman Peter Gutwein said repealing the carbon tax would benefit the Tasmanian economy by reducing power and gas prices, boost the tourism industry with cheaper sailings on the Spirit of Tasmania and assist exporters and farmers with freight prices to drop 3 per cent.

"If Lara Giddings was serious about jobs she'd reject keeping the carbon tax," Mr Gutwein said.

"And if Lara Giddings was serious about rejecting the toxic philosophy of the Greens she'd also reject keeping the carbon tax."