Budget already in deficit, Access says

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Despite the Government's aversion to the 'D word', its budget is already running a deficit of $1 billion, an economic forecaster says.

November 24, 2008 - 8:16AM



Australia's budget is already running a deficit of $1 billion, a leading economic forecaster says.
Access Economics has released its independent economic forecast, which suggests Treasury coffers are worse than expected.
The Federal Government has, for some time now, talked down the possibility of the budget going into deficit, saying the nation is able to withstand the effects of the global economic crisis.
But Economist Chris Richardson told ABC falling commodity prices are already taking their toll on the economy.
''We are headed for deficit pretty fast, China is now slowing, Australia is now in trouble,'' he said. ''Even if Australia's economy gets no worse and the government doesn't spend another cent into this downturn, we're in deficit by a billion dollars next financial year, four billion dollars a year in the years after that.''
Federal Treasurer Wayne Swan says the government's mid-year economic review forecast modest surpluses and modest growth.
''Access (Economics) uses a different approach,'' he told ABC radio. ''It's not unusual for Access to use different measures.''