The Federal government's dwindling revenue forecasts based on the surging Australian dollar would eat its way on the GST allocations of states and territories, according to Queensland financial authorities.

For Queensland Treasurer Andrew Fraser, the plunging federal revenue would also result to smaller GST for the state as federal authorities would be forced to observe cost-cutting measures to offset the loss of government income.

Fraser made his projections ahead of the scheduled Tuesday release of Australia's mid-year economic and fiscal outlook (MYEFO) by Federal Treasurer Wayne Swan, which is anticipated to highlight the need for much-leaner government expenditures.

A sluggish growth for the national economy, according to Fraser, would chip away considerable amount from GST allocations for states and territories as he told AAP that "it is likely that GST allocations will be revised downwards and that will be a pressure for all states and territories alike."

He added that the likelihood of a revenue write-down would be more imminent "if growth and revenues are slowing or not tracking to previous forecasts."

The state treasurer revealed that Queensland was given an allocation of $8.906 billion for the current financial year but the good fortune so far could be reversed as the state also expects losses in state mining royalties with the pangs of a strong local currency starting to be felt by the export industries.

Fraser said that Queensland was anticipating some $3.128 billion in mining royalties for the current year but that could not be realised as he argued that the state "is the second most trade-exposed state economy and so movements in the Aussie dollar do have impacts on the Queensland economy and state government finances."

In this light, the Queensland government called on Mr Swan to exercise restraint on federal spending if only to lighten the pressure on government revenues and remain focused on fiscal reform programs that "are consistent with the discipline required to turn the budget to surplus."

While currently operating on a deficit of up to $41 billion, the federal government has insisted that attaining a budget surplus would not be impossible on 2013 despite its ballooning expenditures and dwindling revenues.