Federal Politics

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Surplus still not ruled out

TRADE Minister Craig Emerson says a surplus this financial year is still possible, despite Treasurer Wayne Swan's admission last week that it was unlikely Labor would be able to deliver on its promise to balance the budget.

''I have not ruled out, and nor should anyone rule out, the possibility of a surplus in 2012-13,'' Dr Emerson told Sky News.

''There are good things going on in the economy,'' he said, citing an improving outlook in car sales, housing and retail.

''I'm not saying a surplus looks likely in 2012-13, but nor should that throw us off the path of pursuing a surplus,'' he said.

Mr Emerson said the budget would return to surplus in 2013-14 if these positive trends were sustained.

''So long as the economy continues to improve we would get a surplus next year,'' he said.

Mr Swan last week said the government would not dramatically cut services to fill a hole in the budget caused by lower than expected tax receipts, and therefore the budget was unlikely to return to surplus in 2012-13.

He would not say when the budget would return to surplus.