Australia set to unveil latest budget

Australia, May 14 – Australia's government is set to unveil its latest budget as it faces questions about its handling of the economy ahead of an election later this year. 

Treasurer Wayne Swan will outline his spending plans, and is expected to say Australia will post its second budget deficit in three years.

 

Analysts expect a deficit of as much as 20bn Australian dollars (£13bn; $20bn) for the financial year 2013-14.

 

The economy has been affected by weaker global demand for commodities.

 

That has hurt Australia's growth and tax income.

 

Some analysts say that while the mining sector has been the driving force behind Australia's steady economic expansion, other parts of the economy have stagnated or grown much less quickly.

 

"The tax system hasn't been delivering as much tax revenues as it should be," said Paul Bloxham at HSBC Australia.

 

"Part of the reason is because the mining tax has underperformed. Also, other sectors of the economy outside of mining have been weak in recent years, and those sectors have not contributed much to tax revenues either."

 

The budget is due to be announced at 19:30 (08:30 GMT) in Canberra, and it is unlikely that the government will unveil any large spending plans, analysts said.

 

At a meeting with ministers ahead of the budget announcement, Prime Minister Julia Gillard said "it's a difficult budget to put together, given the economic circumstances".Source : BBC