Australia vows to be world’s first back in surplus
Australia yesterday vowed to be the first advanced economy to return
its budget to surplus after the global financial crisis, saying it will
be “back in the black” within two years.
Treasurer Wayne Swan is set to release an austere, belt-tightening
budget Tuesday evening to haul in a reported Aus$50 billion (US$54
billion) deficit, in part created by stimulus spending during the
worldwide slump.
“Tonight’s budget will get us back in the black,” Swan told
reporters, saying that forward estimates would show a return to surplus
in 2012/13.
“We will come back to surplus before any other major advanced
economy.”
Resource-rich Australia, with its strong banking system and wealth of
natural minerals, survived the crisis better than most and was the first
advanced economy to lift interest rates in its wake.
As it prepares for the next stage in the Asia-driven mining boom,
interest rates are at 4.75 percent and unemployment at 4.9 percent.
Despite the upside of the commodities boom, massive summer floods and
a monster cyclone are weighing on expenditure and will force sharp cuts
when the national accounts are released, Prime Minister Julia Gillard
has said.
As her centre-left Labor government flails in opinion polls, Gillard
said the tough accounting could prove unpopular.
“This budget won’t be about buying your vote,” she wrote in a
commentary for The Australian newspaper on Monday. “The cutbacks will be
clear.” Gillard said the enduring effects of the global financial crisis
and natural disasters had hurt government revenues, while business had
suffered from consumer caution and the impact of the high Australian
dollar.
The Aussie, which reached parity with the greenback in October and
has continued to climb since, is increasingly making life difficult for
export industries such as manufacturing, tourism and education, she
said.
Meanwhile, the historic floods, which wiped out crops and shut down
coal mines in Queensland, and which the government has said slashed
Aus$9 billion from economic output, would place additional strains on
funding.
But global demand for Australia’s iron ore, coal and gas is expected
to help unemployment drop to 4.5 percent within two years.
AFP
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