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.

  • Catholics organize to promote pope's climate change message

    NEW YORK (AP) — There will be prayer vigils and pilgrimages, policy briefings and seminars, and sermons in parishes from the U.S. to the Philippines. …

  • Forgotten for decades, fallen NY soldier finally honored
    Forgotten for decades, fallen NY soldier finally honored

    ALBANY, N.Y. (AP) — Carroll Heath didn't have it easy growing up in the Great Depression. His father wasn't around, his mother was a patient in a mental hospital and he kept largely to himself. Soon after graduating high school, he enlisted in the Army and wound up in the Philippines, where he's believed to have died sometime in 1942. …

  • APEC trade chiefs vow to speed up work in WTO

    MANILA, Philippines (AP) — Trade ministers from 21 Asia-Pacific countries on Sunday issued strong support to the World Trade Organization's efforts to boost global trade amid a flurry of regional free trade agreements. …

  • Negotiations on TPP in 'end-game', says US trade representative
    Negotiations on TPP in 'end-game', says US trade representative

    Negotiations to form the Trans-Pacific Partnership (TPP) free trade zone are in the "end-game", US Trade Representative Mike Froman said Sunday. Asked about a timetable, Froman said: "We agreed to conclude (the TPP talks) the moment that we have an agreement on an ambitious, comprehensive and high-standard agreement." "The focus will now shift to the US House of Representatives when they come back from recess and we look forward to working with them to get it passed as soon as possible," he …

  • ‘Taklub’ wins jury prize in Cannes
    ‘Taklub’ wins jury prize in Cannes

    The Yolanda-inspired film “Taklub” has won a special award at the Cannes Film Festival in France. The advocacy film, which had a successful premiere last Tuesday under the festival’s Un Certain Regard section, is directed by 2009 Cannes best director Brillante Mendoza and top-billed by Nora Aunor. The award cited the film’s sensitive portrayal of individuals and communities in the Philippines fighting to continue living despite natural disasters exposing them to suffering and death. …

  • Orphan tops chemical engineering board exam
    Orphan tops chemical engineering board exam

    A 21-year-old orphan from Capiz topped the chemical engineering board examinations held this month. Remington Salaya, a cum laude graduate of the Central Philippine University in Iloilo, ranked first in the board examinations with a score of 83.30 percent. Out of 405 chemical engineering graduates who took the exam in mid-May, 239 passed. …

  • A sunset party for APEC delegates
    A sunset party for APEC delegates

    Greeted by the beat of Ati-atihan drummers, delegates of the Asia-Pacific Economic Cooperation trade ministers meeting enjoyed a welcome dinner and cultural presentation at sunset yesterday. Dubbed FuntaSea, Shangri-La Boracay Resort and Spa’s Banyugan Beach was transformed into a fantasy island, complete with mermaids, fire dancers, and choreographed paraws (sailboat) representing the best of Boracay. With APEC meetings being held all over the Philippines, each presentation is conceptualized …

  • UN chief urges peaceful solution of sea dispute
    UN chief urges peaceful solution of sea dispute

    United Nations Secretary-General Ban Ki-moon called Friday for a peaceful solution to territorial disputes in the South China Sea, where China’s increased assertiveness has alarmed its smaller neighbors. In Manila, Presidential Communications Operations Office Secretary Herminio Coloma Jr. appealed to China to respect various international agreements on freedom of navigation and aviation. Coloma’s call came in the wake of an incident Wednesday where Chinese naval forces warned a US …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options