Australian Treasurer Wayne Swan said Thursday that the government's goal of getting the budget back to surplus is "much harder" now due to substantial revenue write-downs and historically low tax levels.
Swan, who is also the Deputy Prime Minister, expects the country to deliver a slim surplus by 2012-13. "Getting the Budget back into surplus is economically imperative in a turbulent new global economic era," he said in a speech in Sydney.
"This surplus will be much harder to achieve because of substantial revenue write-downs and historically low tax levels, coming from global turbulence and longer term structural changes to the revenue base," Swan said.
Revenue write-downs were a big part of the 2011-12 Budget and mid-year review. He said further write downs are expected to be made at the 2012-13 Budget. Swan also stressed on the need to find even more substantial savings in the Budget than anticipated.
Mining investment is driving record levels of total capital expenditure in the economy, which is expected to reach a staggering A$173 billion in 2012-13, he noted. Mining investment as a share of GDP is expected to reach new highs in 2012-13, at over 8 percent. According to Swan, this investment boom is contributing to structural change in the revenue base.
Australia has a "massive pipeline of investment" and this means that the tax deductions available to the mining sector are historically high, and depreciation deductions are already trending up and will accelerate over the next 5 years, the Treasurer said.
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