Treasurer says Australian budget for next fiscal year is dedicated to repaying debt quickly

Australian budget dedicated to repaying debt

CANBERRA, Australia — The government will reveal an economic blueprint Tuesday aimed at reining in Australia’s record debt without alienating voters in an election year.

The budget for the fiscal year beginning July 1 is the Labor Party government’s third and last before Prime Minister Kevin Rudd seeks a second three-year term in power with elections due late this year.

The budget’s chief architect, Treasurer Wayne Swan, said the financial measures for the nation’s 1.2 trillion Australian dollar ($1.1 trillion) economy that he will outline to parliament Tuesday night will be responsible rather than tailored for political gain.

“What we have to do is dedicate this budget to getting back to surplus as quickly as possible,” Swan told reporters outside Parliament on Tuesday morning.

Swan’s first annual budget released in 2008 continued the previous government’s decade-old run of forecast surpluses.

However, government coffers soon dipped into the red with the global economic crisis and new government spending measures and handouts aimed at shielding Australian jobs from the downturn.

The Australian economy narrowly avoided recession, and the jobless rate stands at a better-than-predicted 5.3 percent, making the Australian economy among the most resilient in the developed world to the downturn.

The Age newspaper reported Tuesday that the budget forecasts a return to surplus in the 2012-13 fiscal year, three years ahead of the government’s last forecast a year ago. The report was unsourced.

The government earlier this month announced plans to cash in on booming profits in the mining industry fed by Chinese and Indian industrial demand for minerals and energy.

A 40 percent so-called Resource Super Profits Tax would be introduced in July 2012 and raise an anticipated AU$9 billion in additional revenue a year from big mining companies.

The government plans to use this extra revenue to offset company tax cuts from 30 to 28 percent which in turn would help pay for bigger pension funds for Australia’s workforce.

Swan said Tuesday that the budget would also include major health reforms while containing overall growth in budget spending to 2 percent.

Rudd’s Labor has been riding high in opinion polls since its election in 2007. But recent polls show the conservative opposition has made up ground since Rudd shelved plans to curb Australia’s greenhouse gas emissions by making major polluters pay for the amount of carbon dioxide that they produce.

The government will need opposition support to pass its budget measures through the Senate where Labor holds a minority of seats.

But the main opposition Liberal Party has already said it won’t support the new mining tax because it would drive mining investment overseas.