Australia to hand down budget for 'battlers'

Australian Treasurer Wayne Swan was Tuesday set to deliver the nation's toughest budget in 25 years, bringing its high-powered mining economy back to surplus in the face of global turmoil.

The unpopular government of Prime Minister Julia Gillard has pitched the budget, its fifth since Labor took office in late 2007, at its traditional voters -- the so-called ordinary, hard-working "battlers".

"In many ways this is a battler's budget," said Swan, who has warned of serious fiscal tightening.

"It makes sure we support jobs, it provides cost of living support for those under financial pressure, and it puts in place new initiatives for some of the most vulnerable in our community."

The budget Swan hands down at 7:30 pm (0930 GMT) is expected to turn around a deficit of at least Aus$37.1 billion (US$37.7 billion) from the current financial year 2011-12 to a $1.5 billion surplus in 2012-13.

It is set to include deep cuts in military spending, led by delaying the order of 12 F-35 Joint Strike Fighter jets and scrapping plans to give the army new self-propelled artillery.

Families, though, are set to benefit with more money in the pockets of those with school-aged children, while a national disability scheme will be established.

Swan, who has engaged in a war-of-words with some of Australia's richest people, accusing the vested interests of the powerful of infecting democracy, said the budget was designed to share the prosperity of the mining boom.

The government is hoping its belt-tightening will give the central bank more room to cut interest rates, which stand at 3.75 percent, providing much needed relief for mortgage holders who are battling high real estate prices.

"When you look around the world, when you look at what's happening in Europe, you can see that Australia's economic fundamentals are strong," Swan said.

"What tonight is about is making sure they stay that way and that's why coming back to surplus is so important."

Gillard said that bringing the budget into surplus, which the government says will protect the economy against external shocks, was "the right economic measure now".

The embattled leader, who leads a wafer-thin majority in a parliament hit by scandals, said it was a budget which "goes into bat for millions of Australians on low and middle incomes".

But the conservative opposition has accused the government of producing a "cooked books surplus" by switching expenditure from this financial year into the next.

"Frankly the $1.5 billion surplus is essentially just a rounding error," opposition leader Tony Abbott said.

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