Govt announces larger budget surplus

aap - The federal government said the final budget surplus for 2007-08 was $19.7 billion, $2.9 billion more than estimated at the time of the May budget.

Treasurer Wayne Swan said this was the result of lower than anticipated government
spending, rather than a greater influx of tax revenue.
"As a result of its strong fiscal position, the government is in a position to
invest around $15 billion of the 2007-08 surplus in its three national building
funds," Mr Swan said in a statement.
The higher surplus will also provide additional resources to the Australian Office
of Financial Management - the government's asset manager - to invest in
high-quality, AAA rated residential mortgage-backed securities.
This was an initiative announced by Mr Swan to kick-start the mortgage-backed
securities market, which has been depleted by the global financial market crisis.
The three nation building funds announced in the May budget will have a combined
balance of more than $26 billion by July 1, 2009 for capital investment in the
future infrastructure, education and health needs.
The government will allocate $7.5 billion from the 2007-08 surplus to the Building
Australia Fund.
This contribution, combined with proceeds from the second instalment of the sale of
Telstra 3 and the former Howard government's Communications Fund, will provide $12.6
billion for future investment in our roads, railways, ports and communications
infrastructure.
The government will also allocate $2.5 billion to the Education Investment Fund,
which when combined with assets from the former government's Higher Education
Endowment Fund, will provide $8.7 billion for investment in higher education and
vocational training institutions.
The final $5 billion from the 2007-08 surplus allocation will be invested in the
Health and Hospitals Fund.