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CANBERRA, Australia (AP) â¿¿ The Australian government's promise to deliver a budget surplus in the current fiscal year has blown out to a 19.4 billion Australian dollar ($19.4 billion) deficit as a fading mining boom coupled with a buoyant Aussie dollar slows the economy.
The projected deficit for the 12 months ending June 30 is included in the government's economic blueprint for the coming year released on Tuesday, which includes spending increases in defense, foreign aid, care for the disabled and education.
It is Treasurer Wayne Swan's sixth annual budget and is likely to be the last for his center-left Labor Party government, widely expected to be defeated at elections on Sept. 14.
The budget forecast a smaller AU$18 billion deficit in the fiscal year ending June 2014 with net debt peaking at AU$191.6 billion â¿¿ 11.4 percent of gross domestic product â¿¿ in 2014-15. The books would finally be balanced in 2015-16 with an AU$800 million surplus. The surplus would widen to $6.6 billion surplus the following year.
A year ago, Swan declared an end to budget deficits in the aftermath of the global financial crisis and predicted an AU$1.5 billion surplus in the current fiscal year.
Swan on Tuesday defended his government's decision not to make deeper spending cuts to balance the government's books sooner.
"Cutting to the bone puts Australian jobs and our economy at risk, something this Labor government will never accept," Swan told Parliament.
"To those who would take us down the European road of savage austerity, I say the social destruction that comes with cutting too much, too hard, too fast is not the Australian way," he said.
The budget will have to be endorsed by Parliament over the next two months if it is to be implemented.
Business groups have largely reacted negatively to the budget and questioned whether its assumptions about Australia's economic growth prospects were too optimistic.