Australia's Treasurer Wayne Swan stretched the pathway to reach budget surplus to 2016-17 as the ability to generate tax receipts remains weighed down by a strong currency and falling commodity prices.
In the final budget ahead of the national election in September, Swan focused on growth and backed away from huge austerity measures.
"A more gradual return to surplus is appropriate given significant downgrades to revenue and the transition underway in the economy towards new sources of growth," he said in his budget speech for 2013-14.
Swan estimates the budget to balance in 2015-16 and log a A$6.6 billion surplus in 2016-17 and he outlined A$43 billion savings over the four years to meet this surplus goal.
Tax receipts were significantly impaired by the weaker-than-expected nominal GDP growth, the high Australian dollar and fall in commodity prices. Company taxes, capital gains tax, resource rent taxes have all been hit, he told lawmakers.
Swan said the government has written down the estimated tax receipts for 2012-13 by A$17 billion and expects a total write down of A$60 billion over the next four years.
The government now estimates a budget deficit of A$18 billion or 1.1 percent of GDP in 2013-14.
For the current 2012-13 fiscal year, the underlying cash deficit is estimated at A$19.4 billion or 1.3 percent of GDP, the budget paper showed. That compares to A$1.1 billion surplus estimated in October.
The government estimates the economy to grow 2.75 percent in 2013-14, before accelerating to a pace of 3 percent in 2014-15. Although unemployment is forecast at 5.75 percent in 2013-14, up slightly, it is still among the lowest in the developed world, he told parliament.
Giving thrust to infrastructure, he allocated A$24 billion to construct urban road and rail projects. Swan also emphasized on reforms to education and disability care. He announced an extra A$186 million for research infrastructure.
In order to help achieve the planned saving, he scrapped the Baby Bonus that was popular among voters, even as the election looms.
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