Australian budget sees surplus in 2012-13
The federal budget's spending cuts and strong economic growth predictions forecast a record turnaround in the government's accounts.
Reduced government spending and strong economic growth predictions will enable Australia to deliver the quickest improvement in the country's finances on record.
The federal budget, released last night in Canberra, a return to surplus in 2012-13 of $A3.5 billion, or 0.2% of GDP, compared with a record deficit of $A54.8 billion in 2010.
This will be achieved with a total of $A22 billion in savings over four years. The deficit for the fiscal year beginning July 1 is projected at $A22.6 billion.
Moody’s has reaffirmed Australia AAA credit rating, saying the budget demonstrates the government's determination to return to a fiscal surplus, though this has been made more difficult by the effect of natural disasters.
“Floods have resulted in a deficit about 0.6% of GDP – larger than earlier projected – meaning a steeper decline in the deficit is required to reach the surplus goal,” Moody’s says.
"Net debt is now expected to peak at the end of the next fiscal year at 7.2% of GDP, up about one percentage point from the government's earlier forecast.
"Maintaining the cap on spending growth of 2% in real terms means that this ratio will begin to decline in following years as the budget returns to surplus," Moody’s says.
Treasurer Wayne Swan, describing Australia's budget position as "the envy of the developed world," said the jobless rate would drop to 4.5% by mid-2013 as 500,000 new jobs are created.
The budget outlined a range of measures to boost training programmes, entice the long-term unemployed and others back into the work force and draw 16,000 skilled migrants into areas with jobs to fill.
Economic projections show a strong increase in growth during the coming fiscal year to about 4%. This is supported by continued strong demand for Australia's exports and the continued high level of investment in the resource sector.
Nevil Gibson
Wed, 11 May 2011
Wed, 11 May 2011
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Australian budget sees surplus in 2012-13
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