Strong $A won't stop surplus: Gillard

(AAP) Prime Minister Julia Gillard insists the budget will still return to surplus by 2013 even if the Australian dollar stays strong.

Her promise comes as Treasury prepares to release updated forecasts on Tuesday as
part of its mid-year economic and fiscal outlook.
With the local currency now at parity, there are concerns that revenue from the
mining tax could suffer a serious setback and throw into doubt government revenue
projections.
Still, Ms Gillard insists the government will deliver on an election commitment to
end the deficit.
"The budget will be back in the black, back in surplus in 2012-13 ... as promised,"
she told the Nine Network on Sunday.
The Australian dollar stayed above parity on Friday, reaching 101.75 US cents, its
highest level since being floated in December 1983.
Ms Gillard acknowledged this was likely to play havoc with Treasury's plans.
"You are right, the high Australian dollar has had an impact on revenues and there
(are) consequently revisions that will be seen in the upcoming mid-year economic and
fiscal outlook," she said.
"They particularly affect the mineral resource rent tax and all of that will be in
front of people's eyes in the updated figures, but we are determined to drive the
biggest fiscal consolidation since the 1960s."
The mineral resource rent tax is expected reap $10.5 billion in its first two years
from July 2012.
This revenue projection, however, is likely to be revised, considering the tax was
designed when the Australian dollar was worth less than 90 US cents.
Commodity export earnings are particularly affected because they are priced in US
dollar terms.
A less competitive export sector means the government reaps less revenue from
company and resource taxes.
Treasurer Wayne Swan said his department's forecasts had altered since the
pre-election economic and fiscal outlook was released in July.
"That's just a logical conclusion of the dollar going up," Mr Swan said in an
economic note on Sunday.
Mr Swan reportedly raised currency concerns with finance ministers at the
Asia-Pacific Economic Cooperation (APEC) summit, which he attended at Kyoto in Japan
at the weekend.
Shadow treasurer Joe Hockey said a Labor government was unlikely to deliver a surplus.
"In order to deliver a surplus when you're running a $41 billion deficit you have to
have courage, and this is a government without courage," Mr Hockey told Sky News.
The Australian dollar has surged as traders have taken advantage of Australia's
higher interest rates compared with the rest of the developed world.
But Westpac chief economist Bill Evans is now expecting the Reserve Bank to leave
rates on hold until the second quarter of 2011.
Economic data due out this week will be watched closely for signs of inflationary
pressures.
Economists are expecting official labour force data for October, due out on
Thursday, to show the jobless rate falling by 0.1 of a percentage point to 5 per
cent, as another 20,000 jobs are created.
Australian Bureau of Statistics housing finance data for September are also due out.
But key reaction to the latest rate rise will come from the Westpac-Melbourne
consumer sentiment gauge for November, taken after the Melbourne Cup Day rates
decision.