Budget surplus could still be a long way off say economists

ECONOMISTS are already predicting the return to a Federal Budget surplus in 2013-14 could be at risk, after Treasurer Wayne Swan backed down on the government's promised surplus this financial year.

Chief economist with Westpac, Bill Evans, wrote an update to the federal budget, released on Friday, showing the weak company tax receipts experienced this year could affect next fiscal year's surplus.

He wrote that Mr Swan's statement that a surplus was "unlikely" in 2012-13, coming four months into the financial year, meant there was not enough time to recover the extra revenue this year to bolster the following year's figures.

"With little time left in the year, and a large number of strings already pulled attempting to achieve the surplus, the government has taken the prudent approach by accepting that a surplus in 2012-13 is now unlikely," Mr Evans wrote.

"An additional concern is the impact of weak revenue performance on the estimates for 2013-14."

Mr Evans wrote the government had already deferred forecasting any new budget estimates for the 2012-13 and 2013-14 fiscal positions in the New Year.

This deferral of extra budget estimates could lead, he wrote, to a budget deficit of about $3 billion in 2012-13, growing to a $6.5 billion deficit in 2013-14.

"With current receipts for 2012-13 running at an annualised deficit price of around $8 billion for the first four months, these estimates clearly have downside risks," Mr Evans wrote.



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