The committee for expenditure review included Finance Minister Penny Wong. Photo: Louie Douvis
THE Gillard government has asked public servants to search for fresh spending cuts in the lead-up to Christmas in a new attempt to achieve a 2012-13 budget surplus.
The package of measures that could form a mini-budget or several separate announcements would be unveiled early in the new year in time to improve the position of the 2012-13 budget in the remaining months of the financial year.
After the May budget the Prime Minister politically tied herself to delivering a surplus, saying her government had ''saved jobs, stayed out of recession and got back to surplus''.
The government has restarted its expenditure review committee, something a spokesman for Finance Minister Penny Wong said was ''not unusual'' at this time of year. The committee includes the Treasurer, Prime Minister and Finance Minister.
Departmental officers, who would normally be winding down after the November mid-year budget update, have instead been asked to identify extra savings in the wake of news that the minerals resource rent tax collected almost nothing in revenue in the September quarter and fears of weaker than expected company tax growth.
''Normally after the mid-year outlook Finance and Treasury officials kick back so to speak,'' said former Treasury budget official Chris Richardson of Deloitte Access Economics.
''Things are quiet until the Treasury updates its forecasts in the wake of the September quarter national accounts, which are due this Wednesday. That takes until Christmas. The budget process doesn't really start until early in the new year.''
The Finance Minister's spokesman insisted that the expenditure review committee met ''throughout the year'', especially to look at ''urgent proposals''. Departments ''naturally assist in the process to find considered savings''.
Another former Treasury officer, Stephen Anthony, said ''aggressive'' hunts for further savings in December were rare.
''It's one thing where to take three or four months to agree on a list of savings, that's normal. It's another thing to have people working aggressively before Christmas to come up with a list,'' he said.
''It's my understanding that last occurred in the late Keating years and the early Howard years.'' Mr Anthony runs the Canberra consultancy Macroeconomics, which is forecasting a deficit of $8 billion to $10 billion this financial year rather than the $1.1 billion surplus predicted by the government in November.
''The economy is weaker than the government expected, the terms of trade are weaker than the government expected and we know mining tax revenue is weaker than it expected,'' he said.
''This government is good at keeping up appearances. The measures it is working on will improve the outcome it can credibly forecast on budget night, but they run the risk of further weakening the economy, making the task even harder.''
Asked on Channel Ten's Meet the Press to guarantee she would deliver the forecast surplus, Prime Minister Gillard merely said the November statement showed the budget ''on track'' to achieve a surplus. She stood by its forecasts.
Shadow treasurer Joe Hockey said it was ''abundantly clear the government plans to break another solemn commitment''.
Mr Richardson said with luck the new round of spending cuts could just save the paper-thin forecast surplus. He expected them to be announced early next year on a piecemeal basis rather than in a set-piece economic statement.