Australia Gov't Forecasts $19.4 Billion Deficit
"It is a missed opportunity because it keeps the nation shackled to more years of deficits and a high cost structure that erodes business competitiveness and innovation," Australian Chamber of Commerce and Industry chief executive Peter Anderson said in a statement.
Government revenue has been increasing every year since 2009-10. Tax receipts are forecast to rise 7.4 percent in the next fiscal year to AU$376 billion. But the government has struggled to rein in expenditure ever since its initial splurge of stimulus spending at the peak of the global financial crisis kept the economy out of recession.
Economic growth is forecast to slow from 3 percent in 2012-13 to 2.75 percent next year before gathering pace again.
Most economists were surprised when Australia's jobless rate fell from 5.6 percent in March to 5.5 percent in April. The budget expects unemployment will rise to 5.75 percent for the next two years before falling back to 5 percent in 2015-16.Defense spending is set to increase despite Australian troops withdrawing from Afghanistan, East Timor and the Solomon Islands this calendar year. The defense allocation has swollen from AU$103 billion spread over four years in last year's budget to AU$113 billion over four years in the latest budget. The latest budget includes AU$3 billion over nine years to buy 12 new Boeing EA-18G Growler electronic warfare fighter jets to cover deliver delays in the Lockheed-Martin F-35 Joint Strike Fighter. The cost of a new funding model for schools would increase from AU$17.7 million in the current fiscal year to AU$532 million next year. The government plans to introduce a new levy from July 2014 that would raise AU$11.6 billion over three years to improve care for Australians with severe disabilities. The budget confirmed Foreign Minister Bob Carr's announcement on Monday that foreign aid would increase by 9.6 percent on the current year to AU$5.7 billion next year.
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