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Swan to wield axe on government programs

Thursday, March 29, 2012
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Wayne Swan
Wayne Swan. (AAP)
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Federal Treasurer Wayne Swan has threatened to wield the axe at government programs in order to find extra budget savings.

Mr Swan has to find more savings than anticipated to protect the surplus.

"We're going to have to look very hard at spending," he told ABC radio on Thursday.

"We're going to have to look very hard at priorities."

Mr Swan will restate the importance of returning the budget to surplus in 2012/13 when he addresses an Australian Business Economists' breakfast in Sydney on Thursday.

"In an economy moving back towards trend growth with relatively low unemployment and a record pipeline of investment, it is appropriate for the government to be returning the budget to surplus," he will tell the gathering.

In the mid-year budget update released last November, Treasury forecast a $1.5 billion surplus for 2012/13, after a $37.1 billion deficit in this financial year.

Mr Swan also dismisses claims Labor's determination for a budget surplus is a political strategy rather than an economic imperative, saying Australia needs to send a message of confidence to global investors.

"This is rubbish - there are compelling reasons why the economics of surplus in 2012/13 makes so much sense," he says.

Balancing the budget was appropriate for an economy returning to trend growth at around 3.25 per cent, and was the nation's best defence in the current period of global economic uncertainty, Mr Swan added.

It would also give the central bank more flexibility on interest rates if the global economy turned weaker.

Mr Swan declined to say whether there would be any new programs or a crackdown on middle class welfare.

"I'm not going to rule in and rule out things and play that game," he told ABC Radio.

"What we will do in this budget is what is right for the country."

He also refused to speculate on whether the government would apply a means test to the 50 per cent childcare rebate or if it was scared of a voter backlash.

But the treasurer said it was getting tougher to find savings.

Global turbulence particularly from Europe impacted on revenue late last year, he said.

Another factor was the "structural change" to company tax.

"We're receiving less than what we expected in that area as well," he said.

21/12/2014 21:39Sydney, Australia. 21 December,2014
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