Australian banking on budget surplus

The Australian government said it remains on target to return the budget to surplus in the next fiscal year despite the European debt crisis slashing revenue by AUS$20bn (US$20bn) a year.

The government announced in its midyear budget update today that the deficit in the current fiscal year which began on July 1, 2011, will be a higher than expected AUS$37bn.

When the budget was released in May, the deficit was forecast to reach AUS$22.6bn.

Treasurer Wayne Swan said that with new saving measures, the government will deliver a narrow surplus of AUS$1.5bn in the next fiscal year – two billion Australian dollars less than forecast in May.