Australia has lost A$7.5 billion ($7.7 billion) in revenue since the October mid-year budget review due to its strong currency and lower terms of trade, worsening its budget position, Treasurer Wayne Swan said.
“We’ve been hit in Australia with a high dollar, lower terms of trade, which has had a dramatic impact upon the profitability of companies and prices more generally in the economy,” Swan said in an interview on the Australian Broadcasting Corp.’s ‘Insiders’ program yesterday. That’s caused “a sledgehammer to revenues in the budget since the mid-year update of something like A$7.5 billion.”
Prime Minister Julia Gillard, whose ruling Labor party is trailing the Liberal-National coalition in opinion polls ahead of Sept. 14 national elections, has pledged to restrain spending before the May 14 release of the annual budget. Australia faces years of deficits due to tax shortfalls and declining prices for resources, an independent think tank said today.
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