THE NEWS WRAP: Swan hints at new infrastructure spending in tonight’s budget

Treasurer Wayne Swan has hinted at new infrastructure spending in tonight’s budget, while challenging Tony Abbott to reveal where he would cut spending in order to fund the DisabilityCare national disability insurance scheme.

 

In an article in The Australian, Swan also reiterated the government’s plans for the Gonski school funding reforms and again claimed the government faced revenue shortfalls as a result of the high Australian dollar.

 

“I will also outline further productivity-enhancing infrastructure commitments building on the Gillard government’s already strong record of nation-building after years of neglect by previous governments,” Swan wrote.

 

“This is a test for Tony Abbott: if he supports DisabilityCare, then he needs to support the responsible savings we’re making to fund it over 10 years – or tell us what he would cut.”

 

Dollar needs to fall further to help food industry

 

The food industry has welcomed recent falls in the Australian dollar, but warns the dollar will need to fall further – to around 76 cents – for Australian food processing to remain viable in the long term.

 

“There’s no doubt the high dollar has a significantly negative effect on the competitiveness of food manufacturing in Australia, so the recent falls are welcome,” Australian Food and Grocery Council chief executive Gary Dawson.

 

“But it would need to move lower for longer to start having some impact.”

 

Australian dollar to remain under pressure: Analysts

 

Leading analysts are predicting the Australian dollar will remain under pressure, against the backdrop of a strengthening greenback and weakening resource demand from China and India.

 

“There’s been a rethink more recently on the outlook for the Australian dollar,” HSBC’s Asia head of currency research, Paul Mackel, told Fairfax.

 

“I think the market has come to realise that as China’s economy is slowing, maybe the Australian economy is not going to be benefiting from the commodity story the way it has been in previous years.”

 

Overnight

 

The Dow Jones Industrial Average is down 0.18% to 15091.68. The Aussie dollar is up to US99.57 cents.

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