PM 'determined' to deliver surplus
"We’ve got a resilient economy,’’ says Prime Minister Julia Gillard. Photo: Alex Ellinghausen
Prime Minister Julia Gillard says her government is still ''determined'' to deliver a surplus, amid reports that Labor is preparing to abandon its commitment to bring the budget back to black.
Ms Gillard said on Friday that Australia's economic fundamentals were ''still strong''.
''Our last economic update had us at trend growth,'' she told ABC Radio in Sydney. ''We are still determined to deliver the surplus.''
According to the Australian Financial Review, the federal government is preparing to dump its long-held surplus commitment if economic growth slips in the next quarter.
In the mid-year economic update released in October, the government downgraded its surplus forecast from $1.5 billion to $1.1 billion.
The Financial Review reports there are indications the government will make an assessment about the surplus in March when the next quarter's national accounts are released, ahead of the 2013-14 budget in May.
This comes amid some weaker economic data this week, showing the economy grew at a more modest pace than expected in the first three months of the 2012-13 financial year.
When asked if her government had given up on a surplus, Ms Gillard said she was happy to explain Australia's economic circumstances.
''I want people to understand the true currents and pressures in our economy.''
She said that mining was ''still strong'' but the prices Australia was receiving for mineral exports were ''coming down a bit'' and other sections of the economy were ''feeling the pressure'' of the high Australian dollar.
''Even with those forces at work, we've got a resilient economy.''
The Australian Bureau of Statistics September-quarter national accounts report released on Wednesday showed growth expanded by just 0.5 per cent, dragging the annual rate down to 3.1 per cent from a brisk pace of more than four per cent in the early part of 2012.
Earlier this week, former central bank governor Bernie Fraser said Australia was suffering from the ''stupidity of government'' and looking for a surplus when monetary policy was going the other way was ''just plain dumb''.
Treasurer Wayne Swan dismissed the remarks, saying: ''No, I don't believe he is correct.'' He also said the government was still committed to returning the budget to surplus. In 2010, Mr Swan said there would be a surplus ''come hell or high water''.