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209285
Sun, 09/25/2011 - 13:57
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http://m.oananews.org//node/209285
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Govt still committed to 2012/13 surplus
(AAP) - Treasurer Wayne Swan says the government remains committed to returning the federal budget to surplus despite a slowdown in the global economy making the task tougher.
Financial markets slumped further in the past week as concerns about the stability of the eurozone continue to escalate.
Mr Swan said the government's aim for a budget surplus in 2012/3 remained despite the tougher global economic conditions.
The IMF forecast global growth falling tofour per cent this year and next from 5.1 per cent in 2010, due to anaemic growth in advanced economies.
Australia's growth forecast was cut to 1.8 per cent in 2011 - down from 3 per cent - but the IMF predicted the economy would expand by 3.3 per cent in 2012.
In May, the government forecast a budget surplus of $3.5 billion for 2012/13 after four consecutive deficits.
"These events globally have an impact on global growth, that has an impact on domestic growth, that has an impact on revenue collections," Mr Swan said.
"Of course, it makes it tougher to come back to surplus.
"We are determined to come back to surplus."
The Treasurer is attending the annual meetings of the World Bank and International Monetary Fund in Washington, where the prospect of an economic meltdown in Europe weighed on the finance ministers from the Group of 20 (G20) nations.
Mr Swan said the mood around the tables with his G20 colleagues was one of "sober realism".
"Ministers appreciate the challenge and they are certainly up for the response," Mr Swan told ABC Television on Sunday.
The Treasurer said the problems required coordinated actions to restore the Eurozone.
"We do need not just a European response in the first instance, we always need bodies like the G20 and the IMF backing up the Europeans," Mr Swan said.
He said policymakers had learnt much since the global economic meltdown in September 2008.
"There's no doubt that what we are now living with is basically the scars from the global financial crisis and the global recession, which have surfaced now in Europe in terms of sovereign debt concerns which are impacting on the banking system," Mr Swan said.
But opposition finance spokesman Andrew Robb said Prime Minister Julia Gillard and Mr Swan should be acting to "fireproof" Australia's economy from another downturn instead of lecturing Europe.
"Reducing business and household costs must be the priority," Mr Robb said in a statement on Sunday.
"Cutting government spending and regulations will take pressure off interest rates and the exchange rate."
Mr Swan said reform of the tax system would support businesses to cope with the pressures from a changing economy.
He said any changes to the tax system had to be funded.
"We can't talk tax cuts without also talking about the harder things like loopholes and unnecessary tax expenditures," he said.
"And I've made it very clear that sending households the bill for business tax cuts by increasing the rate or base of the GST is not the answer."
The government has ruled out discussions about the goods and services tax at the Tax Forum on October 4 and 5 in Canberra.
While in Washington, Mr Swan will receive his Euromoney Finance Minister of the Year award announced last week.
Mr Swan said the award was for the hard work by Australians during the global financial crisis.
"The recognition serves us as a great reminder of what our nation has achieved together over the past few years and gives us confidence to meet these challenges in the years ahead," he said.
Financial markets slumped further in the past week as concerns about the stability of the eurozone continue to escalate.
Mr Swan said the government's aim for a budget surplus in 2012/3 remained despite the tougher global economic conditions.
The IMF forecast global growth falling tofour per cent this year and next from 5.1 per cent in 2010, due to anaemic growth in advanced economies.
Australia's growth forecast was cut to 1.8 per cent in 2011 - down from 3 per cent - but the IMF predicted the economy would expand by 3.3 per cent in 2012.
In May, the government forecast a budget surplus of $3.5 billion for 2012/13 after four consecutive deficits.
"These events globally have an impact on global growth, that has an impact on domestic growth, that has an impact on revenue collections," Mr Swan said.
"Of course, it makes it tougher to come back to surplus.
"We are determined to come back to surplus."
The Treasurer is attending the annual meetings of the World Bank and International Monetary Fund in Washington, where the prospect of an economic meltdown in Europe weighed on the finance ministers from the Group of 20 (G20) nations.
Mr Swan said the mood around the tables with his G20 colleagues was one of "sober realism".
"Ministers appreciate the challenge and they are certainly up for the response," Mr Swan told ABC Television on Sunday.
The Treasurer said the problems required coordinated actions to restore the Eurozone.
"We do need not just a European response in the first instance, we always need bodies like the G20 and the IMF backing up the Europeans," Mr Swan said.
He said policymakers had learnt much since the global economic meltdown in September 2008.
"There's no doubt that what we are now living with is basically the scars from the global financial crisis and the global recession, which have surfaced now in Europe in terms of sovereign debt concerns which are impacting on the banking system," Mr Swan said.
But opposition finance spokesman Andrew Robb said Prime Minister Julia Gillard and Mr Swan should be acting to "fireproof" Australia's economy from another downturn instead of lecturing Europe.
"Reducing business and household costs must be the priority," Mr Robb said in a statement on Sunday.
"Cutting government spending and regulations will take pressure off interest rates and the exchange rate."
Mr Swan said reform of the tax system would support businesses to cope with the pressures from a changing economy.
He said any changes to the tax system had to be funded.
"We can't talk tax cuts without also talking about the harder things like loopholes and unnecessary tax expenditures," he said.
"And I've made it very clear that sending households the bill for business tax cuts by increasing the rate or base of the GST is not the answer."
The government has ruled out discussions about the goods and services tax at the Tax Forum on October 4 and 5 in Canberra.
While in Washington, Mr Swan will receive his Euromoney Finance Minister of the Year award announced last week.
Mr Swan said the award was for the hard work by Australians during the global financial crisis.
"The recognition serves us as a great reminder of what our nation has achieved together over the past few years and gives us confidence to meet these challenges in the years ahead," he said.
