Australia's Treasurer and Deputy Prime Minister Wayne Swan said Monday that the government remains firmly committed to get the budget back to surplus in 2012-13, though the recent decline in commodity prices makes the task much more difficult.
Releasing the Final Budget Outcome 2011-12, he said the underlying cash deficit for 2011-12 was A$43.7 billion or 3 percent of GDP for 2011-12, compared with the A$44.4 billion projected in the May budget.
The moderate improvement of A$661 million from the 2012-13 budget estimate was the smallest variation between the budget estimate and outcome for a decade, Swan noted. This variation can be attributed to the government's lower cash payments and higher tax receipts.
The government data showed that total taxation receipts for 2011-12 were around A$290 million higher than forecast in the 2012-13 Budget, consistent with solid wages and employment growth. However, this figure masks a hefty fall of A$876 million in company tax receipts due largely to lower corporate profits.
The final budget outcome shows that "Australia's public finances remain amongst the strongest in the developed world, providing further evidence of Australia's strong economic fundamentals," the Treasurer said in a statement.
"While the decline in commodity prices in recent months will inevitably make it more difficult to return the budget to surplus in 2012-13, the government remains committed to doing so," he added.
Australian government net debt was A$147.3 billion or 10 percent of GDP in 2011-12, according to the report.
The International Monetary Fund said last week that in the event of a sharp deterioration in the economic outlook, Australia has the scope to delay the planned return to surplus and let the automatic stabilizers operate, given its modest public debt.
IMF also noted that with expected inflation within the target range, the strong Australian dollar, and given efforts to return the budget to surplus this year, monetary policy should remain accommodative, and should act as the first line of defense against near-term adverse shocks.
by RTT Staff Writer
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