CANBERRA, March 18 (Reuters) - Australian Treasurer Wayne Swan has played down expectations that his May budget will show a rapidly improving bottom line, newspapers said on Thursday, in comments that could spur talk of some pre-election giveaways.
Swan told a closed-door business briefing on Wednesday that recent forecasts by several major banks of a huge recovery in the budget deficit were 'cloud cuckoo land', the Australian Financial Review newspaper said.
It also quoted Treasury officials as warning the government that an accelerating economic recovery would not mean any immediate improvement in budget revenue forecasts, which are due to be updated when Swan hands down the 2010/11 budget on May 11.
Current official forecasts show no return to surplus until 2015/16. Macquarie Research this week said the budget could be back in surplus by 2011/12, four years earlier than expected.
The Finance Department in December reported revenues were A$2.8 billion ($2.59 billion) higher than forecast for the first six months of 2009/10, leaving the deficit for the period at A$32.9 billion, down from a previous estimate of A$39.5 billion.
Some banks and major papers have tipped that this stronger outcome means that the forecast A$57.7 billion deficit for the fiscal year to end-June 2010 could be up to A$15 billion lower.
Swan has said the May budget will lock in spending curbs and resist the temptation to offer election-year largesse. But there are some doubts about this, given the May budget will the last before the next general election, due to be called by early 2011.
A stronger budget and an earlier return to surplus would be a political boost for Prime Minister Kevin Rudd, allowing him to counter criticism from opponents who say he has borrowed too heavily and yet still leave scope to continue his heavy spending.
($1=1.082 Australian Dollar)
(Reporting by Rob Taylor; Editing by Mark Bendeich)
((rob.taylor@thomsonreuters.com; +612 62733700; Reuters Messaging: rob.taylor.reuters.com@reuters.net)) Keywords: AUSTRALIA POLITICS/BUDGET (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Swan told a closed-door business briefing on Wednesday that recent forecasts by several major banks of a huge recovery in the budget deficit were 'cloud cuckoo land', the Australian Financial Review newspaper said.
It also quoted Treasury officials as warning the government that an accelerating economic recovery would not mean any immediate improvement in budget revenue forecasts, which are due to be updated when Swan hands down the 2010/11 budget on May 11.
Current official forecasts show no return to surplus until 2015/16. Macquarie Research this week said the budget could be back in surplus by 2011/12, four years earlier than expected.
The Finance Department in December reported revenues were A$2.8 billion ($2.59 billion) higher than forecast for the first six months of 2009/10, leaving the deficit for the period at A$32.9 billion, down from a previous estimate of A$39.5 billion.
Some banks and major papers have tipped that this stronger outcome means that the forecast A$57.7 billion deficit for the fiscal year to end-June 2010 could be up to A$15 billion lower.
Swan has said the May budget will lock in spending curbs and resist the temptation to offer election-year largesse. But there are some doubts about this, given the May budget will the last before the next general election, due to be called by early 2011.
A stronger budget and an earlier return to surplus would be a political boost for Prime Minister Kevin Rudd, allowing him to counter criticism from opponents who say he has borrowed too heavily and yet still leave scope to continue his heavy spending.
($1=1.082 Australian Dollar)
(Reporting by Rob Taylor; Editing by Mark Bendeich)
((rob.taylor@thomsonreuters.com; +612 62733700; Reuters Messaging: rob.taylor.reuters.com@reuters.net)) Keywords: AUSTRALIA POLITICS/BUDGET (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.