IMF applauds Australia's surplus plans

The International Monetary Fund Monday applauded Australia's plan for a budget surplus, saying it will help "rebuild fiscal buffers", in comments the government seized on as "a ringing endorsement".

Treasurer Wayne Swan is set to unveil one of the toughest budgets in years for the mining-powered economy on Tuesday, with deep spending cuts expected to meet a targeted modest surplus next financial year.

Writing in The Australian Financial Review, IMF chief Asian economist Anoop Singh said a commitment to return to surplus in 2012-13 would put Australia in an even better position to buffer against economic shocks.

"In light of the historical terms of trade highs and the significant structural change in the economy, tighter fiscal policy combined with an easier monetary stance represents an appropriate policy mix," he said.

However, he warned of an upside risk to the Australian economy, with investment in the resources sector potentially larger than expected, which would boost growth and push up wages and inflation.

Singh added that not all sectors of the economy were benefiting from the mining boom, and reforms were required to "build a more flexible economy" to ensure resilience.

Australia, which survived the global financial crisis without dipping into recession, has previously been forecast by the government to deliver a Aus$1.5 billion ($1.6 billion) surplus for the 2012-13 fiscal year beginning July 1.

A surplus would represent one of the fastest budget reversals in Australian history, overcoming a current year deficit predicted to be at least Aus$37.1 billion.

The Australian newspaper reported that in the budget Swan would cut the ratio of government spending to gross domestic product by 1.6 percent to 23.5 percent in 2012-13.

The figure would be the biggest fall in government spending as a share of GDP since 1987-88, it said.

Swan on Monday said the budget would show the Australian economy "walks tall in the global economy but supports lower and middle income earners at home", and trumpeted Singh's assessment.

"What we've seen is a ringing endorsement from the International Monetary Fund," the treasurer said.

The budget release comes amid mounting speculation that Prime Minister Julia Gillard, who is performing dismally in opinion polls, will face a challenge to her leadership from within Labor's ranks.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Isuzu PH announces new President
    Isuzu PH announces new President

    Isuzu Philippines Corporation (IPC) formally announced the appointment of Hajime Koso as the new president replacing outgoing president Nobuo Izumina, who will be assigned as the Director of Isuzu Body Corporation, an affiliate of Isuzu Motors Limited (IML) in Japan. A native of Okayama Japan, the 57 years old executive has been working for IML for 35 […] The post Isuzu PH announces new President appeared first on Carmudi Philippines. …

  • Pacquiao sees fist of God delivering win over Mayweather
    Pacquiao sees fist of God delivering win over Mayweather

    Filipino boxing hero Manny Pacquiao is confident he can beat American arch-rival Floyd Mayweather in Las Vegas on Saturday with the power of God, after abandoning a life he said was packed with sin condemning him to hell. Pacquiao is in top form both in mind and spirit after he traded his boozing, gambling and womanising ways for a devout life of prayer, his spiritual adviser, Jeric Soriano, told AFP in a recent Manila interview. Except the world got to him," Soriano said of Pacquiao's …

  • Honda sells Limited Edition CR-V and Jazz
    Honda sells Limited Edition CR-V and Jazz

    Honda Cars Philippines, Inc. (HCPI) is starting to roll out their limited edition models—the all-new Jazz and CR-V. The 20 units of all-new Jazz Cool Blue Limited Edition will have refreshing Brilliant Sporty Blue paint color and factory-installed Modulo accessories while the 10 new CR-V 2.4 SX units are available with limited edition Gold Brown […] The post Honda sells Limited Edition CR-V and Jazz appeared first on Carmudi Philippines. …

  • Celebrities urge Australia PM to do more to save execution pair
    Celebrities urge Australia PM to do more to save execution pair

    Celebrities including Oscar winner Geoffrey Rush released a video Tuesday urging Australian Prime Minister Tony Abbott to fly to Indonesia to help save two citizens facing execution, forcing the government to defend its tactics. "Bali Nine" drug traffickers Myuran Sukumaran and Andrew Chan could face the firing squad within hours, along with others from Brazil, Nigeria, the Philippines and an Indonesian prisoner. Australia, Indonesia's close neighbour, has mounted a sustained diplomatic …

  • ISIS has not penetrated Phl – AFP
    ISIS has not penetrated Phl – AFP

    Security officials yesterday maintained that the Islamic State of Iraq and Syria (ISIS) has not penetrated the Philippines following an expert’s warning that the group poses a threat to the country. Abu Sayyaf, BIFF (Bangsamoro Islamic Freedom Fighters), private armed groups to our knowledge are the people making problems down south,” Armed Forces chief Gen. Gregorio Catapang Jr. said. The BIFF and the Abu Sayyaf have pledged allegiance to the ISIS but it remains uncertain whether they are …

  • Cerbo named national police intel chief
    Cerbo named national police intel chief

    Philippine National Police officer-in-charge Deputy Director General Leonardo Espina yesterday ordered the appointment of PNP spokesman Chief Superintendent Generoso Cerbo Jr. as chief of the Directorate for Intelligence. …

  • Pump prices up anew
    Pump prices up anew

    Oil companies announced yesterday another round of price hikes with independent oil firms among the first to issue their respective announcements. PTT Philippines, the local subsidiary of Thailand’s biggest oil firm, and Phoenix Petroleum Philippines, another independent oil company, were among the first to issue their respective advisories. Seaoil Philippines also issued its announcement. …

  • PNP to ease rules on gun permit processing
    PNP to ease rules on gun permit processing

    The Philippine National Police will simplify requirements for getting a firearm’s permit under the new gun control law, PNP officer-in-charge Deputy Director General Leonardo Espina said yesterday. Espina said they are working to simplify the process to secure a license to own and possess firearms (LTOPF) amid complaints of excessive requirements from gun holders. Espina directed the Firearms and Explosives Office (FEO) to make it easier for legitimate gun owners to comply with the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options