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Government forced to rewrite budget

Government forced to rewrite budget

Mon September 24, 2012 11:58am

THE Government has to re-write the Budget it delivered four months ago because of a slump in mineral prices, Wayne Swan said.

The hint of an emergency mini-Budget late in the year came as official figures showed the Government did slightly better than forecast but still had a deficit of close to $44 billion in 2011-12.

The Treasurer today stuck to his pledge of a surplus in the 2012-13 financial year but said it would require further "responsible, measured savings'' it hopes won't cost jobs.

"And we remain committed to delivering a surplus as Australia's best defence at a time of on-going global turbulence,'' Mr Swan told reporters in Canberra.

The 2011-12 Budget came in almost exactly as forecast, according to Treasury figures released today showing a slightly smaller deficit.

The forecast had been for a deficit of $44.4 billion but the final result was slightly less - down $661 million to $43.7 billion - thanks to a $305 million cut in spending and a $356 million rise in revenue.

The Government has pledged a modest $1.5 billion surplus for this current financial year but any official confirmation will not be available until this time in 2013 - possible in the middle of an election campaign.

The accuracy of the 2011-12 Budget forecasts will reinforce the Government's ability to ask voters to trust its calculations of the promised 2012-13 surplus.

Mr Swan said the Government had a "a credible path for fiscal consolidation by returning the Budget to surplus in 2012-13''.

"It's also obvious that commodity prices have declined somewhat in recent months and they do remain substantially lower than what we factored into our Budget forecasts,'' he said.

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