Swan continues to defend ditching surplus: Midday roundup

Treasurer Wayne Swan has continued to defend the government’s decision to abandon its goal of reaching a surplus in the next financial year.

After having announced yesterday it would be “unlikely” the budget would be back in surplus next year, the government has been the target of criticism from the Opposition.

But Swan told the Nine Network this morning that given the large gap in revenue, “it would simply be irresponsible to make very significant cuts now”.

“Our job is to get these big economic calls right, and that’s the call that we’ve made.”

However, Opposition treasury spokesman Joe Hockey said the problem wasn’t the budget, but rather the government’s spending habits.

“The Labor Party is getting the revenue in, the problem is they are wasting money,” he said.

Shares rally on solid offshore leads

The Australian sharemarket has opened stronger today after a solid lead from the United States, where investors are becoming more optimistic a deal will be struck between Congressional Democrats and Republicans.

The benchmark S&P/ASX200 index was up 22 points or 0.5% to 4656.1 at 12.00 AEST, while in the United States the Dow Jones Industrial Average rose 59 points or 0.4% to 13,311.7.

United States fiscal cliff bill passes lower house

The United States House of Representatives has now passed its latest bill in an attempt to stop the so-called fiscal cliff from occurring.

The bill, called “plan B”, comes as negotiations are continuing between Republicans and Democrats. The latest effort extends tax breaks for those earning less than $US1 million – although president Barack Obama wants to drop that rate to $US400,000.

Both sides have said talks are ongoing.

Boart shares over earnings guidance

Shares in mining services company Boart have risen 8.7% this morning, after the company said it would continue to look for cost savings.

The move follows a recent decision to lay off 2,500 workers. The company says it will reduce overheads by about 20% in order to save money.

“While we have completed our stated cost saving initiative, we continue to review opportunities to further rationalise our overhead cost structure,” interim chief executive David McLemore said in a statement.