Budget `will be fiscally responsible`

It may be a federal election year, but voters should not expect to be overloaded
with sweeteners in the May budget.
Assistant Treasurer Nick Sherry says the budget will be "fiscally responsible" and
the Expenditure Review Committee is in a "tough, rigorous process" to restrain
spending.
Asked on ABC television on Thursday whether the budget will be fiscally prudent or
electorally popular, Senator Sherry said: "We have set out the targets of restraint
on expenditure. We will meet that".
"Our focus is, obviously, on continuing to maintain the strength of the Australian
economy, being fiscally responsible. That's the continual focus of the government in
its economic approach and that will be reflected in the budget. I'm very sure of
that."
Treasurer Wayne Swan, who will hand down his third budget on May 11, has said the
government was already applying a promised a two per cent cap on new spending to
help get the budget back to surplus, even though the economy has yet to reach trend
growth.
"It's a tough discipline ... and it's one we are happy to be measured by," Mr Swan
said in his national accounts press briefing.
But Senator Sherry said the government intended to continue with its remaining
stimulus measures.
This is despite the economy being clearly over the worst of the economic downturn
and continued attacks from the opposition to end the spending.
The national accounts showed the economy raced along at it fastest quarterly pace in
two years in the three months to the end of December, lifting the annual growth rate
to a solid 2.7 per cent.
Senator Sherry said the government would continue to rollout its
"productivity-boosting" investments in schools, roads, bridges, ports and railways.
"That's very important because as the economy has strengthened we need to improve
productivity and efficiency," he said.
"We don't want to go back to a circumstance where, for example, at our ports there
are boats waiting off-shore because of lack of investment in ports and railways."
Still, the country's current infrastructure didn't appear to be a hurdle for
exporters in trade data released on Thursday, posting a second consecutive month of
growth in January.
In January, exports rose 1.0 per cent, while imports declined 3.0 per cent, leading
to a billion dollar narrowing in the trade deficit.
"A billion dollar fall in the trade deficit is another positive sign for the
Australian economy after the worst global recession in 75 years," Trade Minister
Simon Crean said in a statement.
"Exports are still below pre-crisis levels, but for first time since the onset of
the global financial crisis we have seen exports increase in two consecutive
months," Mr Crean said.
The last time it occurred was in September and October 2008.
The January trade deficit for goods and services at a seasonally adjusted $1.176
billion was also the smallest in six months.
This compared with a downwardly revised shortfall of $2.174 billion in December,
figures released by the Australian Bureau of Statistics (ABS) on Thursday show.