Treasurer Wayne Swan has acknowledged it’s unlikely the government will deliver the budget surplus it had been promising for next year, following the release of a disappointing monthly financial statement for October.
“There has been a substantial hit to profits that Australian companies have experienced in the early months of this financial year,” Swan told journalists in Canberra yesterday.
The government had planned to deliver a surplus of $1.1 billion for 2012/13, however today’s October financial statement showed falling cash receipts, with a $3.9 billion reduction in the four months to November.
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“What we’re seeing in our own numbers today means that $160 billion has been ripped from the budget bottom line over five years,” Swan said.
He argued that it was falling revenues rather than increased government spending that was hurting the budget outcome, adding that it would not be responsible for the government to continue to make up the revenue hole if it threatened growth or jobs.
The Conversation has collected expert reaction to this news from economic, business and political experts.
Sinclair Davidson, professor of institutional economics at RMIT University
It was inevitable, mostly because this is a government that spends too much money.
Every year they’ve been talking about cuts but these cuts have always been on future expenditure or proposed expenditure. They’ve never actually cut current expenditure.
I think the government has been right in trying to return to a budget surplus. It is good policy to have a budget in balance or surplus rather than deficit.
Unfortunately they haven’t had the fiscal discipline to cut the spending they should have.
The problem with planning to go into deficit is when the unexpected happens it makes it very difficult for you to return to surplus.
They spent too much on the stimulus packages in 2009.