Australia's Treasury projected a slightly larger budget deficit this year and surplus in 2013 as it issued pre-election forecasts that mainly reiterated data released two weeks ago.
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The incoming government will face a shortfall of A$40.7 billion ($36.4 billion) in 2010-11, up from A$40.4 billion forecast in an economic statement issued by Treasurer Wayne Swan on July 14, and a surplus of $3.5 billion in 2012-13, up from A$$3.1 billion, Treasury said in a statement.
Today's document is part of a so-called charter of honesty that gives the opposition a chance to see how much money is available for new spending ahead of the Aug. 21 ballot. The Treasury reaffirmed its forecast that gross domestic product would rise 3 percent in 2010-11.
Prime Minister Julia Gillard's Labor Party and opposition leader Tony Abbott's Liberal-National coalition are vying over who can better manage the nation's finances. Both pledge to return the budget to surplus and maintain an independent central bank and its inflation target of 2 to 3 percent in an economy that expanded for a fifth straight quarter in the three months ended March 31.
Gillard says the Labor government's stimulus measures helped the nation skirt last year's global recession. Abbott says the A$42 billion the government handed out since the global financial crisis helped push the central bank to increase interest rate six times since last October.
Source: Marion Rae, Business Week
