Treasurer Wayne Swan said today the Federal Government will have a budget deficit of $54.8 billion during the 2010 financial, representing a $2.3 billion improvement from the previous estimate.
In a joint statement with finance minister Penny Wong, Swan said the final budget outcome was due to a number of factors including low spending, reduced interest costs and underspending in some programs.
“The final budget outcome for 2009-10 shows Australia’s budget is in far better condition than the budgets of other comparable nations, putting us in a strong position to deliver a surplus in 2012-13,” he said.
“The outcome for 2009-10 shows a small fiscal improvement from the estimate at the May Budget, but also highlights the fiscal consequences of the global recession.”
The update shows net debt came to $42.3 billion during 2009-10, representing about 3.3% of GDP. Total cash payments were $2.6 billion lower than in the budget, while tax receipts were $14 million higher than expected.
“While Australia avoided recession and the large-scale job losses and business closures that occurred elsewhere in the world, the sharp falls in global commodity prices and business profits that accompanied the global recession had a big impact on revenues and the fiscal position,” Swan said.
Speaking to reporters, Swan said he would refuse to speculate about an earlier-than-expected budget surplus.
“We have put our forecast out there, we stick with our forecasts,” he said in response to queries regarding the booming mining industry. “We don’t count on commodity prices staying high forever,”
“By and large, [prices] have worked out, but I am not going to speculate about whether they will stay there or not.”
Outdoor clothing and good retailer Kathmandu has recorded a net profit decline of 36.9% to $NZ9.4 million, ($AU7.2 million), with revenue rising 14% to $NZ245.8 million.
Chief executive Peter Halkett said in a statement the company is confident about the future and predicts improved economic conditions will arrive soon.
“Kathmandu is confident that given reasonable economic conditions there will be further improvement in profitability in the year ahead,” he said.
“The impact of the economic environment on consumer confidence, and cost pressures both domestically and internationally are a challenge, however given our market position and brand strength we remain well placed to continue our growth.”
In the mining industry giant BHP Billiton has approved the development of the $1.5 billion Macedon gas field in Western Australia. .
“Macedon will be a valuable asset for our company and will improve the security for domestic gas supplies in both the short and medium term for Western Australia,” petroleum chief executive J. Michael Yeager said in a statement.
“It will be the first development in the important Ashburton North area and will make a strong contribution to the overall growth of our Petroleum operations in WA.”
The Australian sharemarket has opened lower this morning following a weak lead in the United states where investors are still concerned about the country’s sluggish economic recovery.
The benchmark S&P/ASX200 index was down 39 points or 0.86% to 4594.3 at 12.10 AEST, while the Australian dollar opened lower to $US94.9c.
Westpac shares lost 1.1% to $23.45 as Commonwealth Bank shares fell 0.6% to $52.12. ANZ lost 1.2% to $23.58 as NAB lost 1.2% to $25.63.
Also in the mining industry giant Rio Tinto has said it will spend $US230 million in raising the capacity of its iron ore operations in the Pilbara region by five million tonnes to 230 million tonnes by the first quarter of 2012.
“This incremental capacity will add substantial value and will position our integrated Pilbara operations well as we finalise plans on how best to move to a 330 Million tonnes capacity and beyond,” Rio Tinto iron ore chief executive Sam Walsh said in a statement.
“Rio Tinto’s Parker Point facility at Dampier port is our single largest and busiest port operation,” he said.
New data from the United States reveals sales of previously owned US homes jumped in August from a 13-year low – but unemployment claims have continued rise.
The figures from the Labor Department reveal state unemployment benefits increased by 12,000 to 465,000, coming off two consecutive weeks of declines. Economists had predicted claims to remain steady at 450,000.
The news sent the Dow Jones Industrial Average down 76.89 points or 0.72% to 10,662.42.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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