Falling commodity prices will hurt Australian government efforts to rein in its budget deficit, spurring possible new savings measures, according to Treasurer Joe Hockey. “Lower commodity prices in iron ore and coal are going to have an impact on our budget bottom line,” Hockey said in an interview in New York yesterday. “There are many variables at play but there will be a negative impact.”
Australia, which is the world’s largest exporter of iron ore and steelmaking coal, is battling to bring the budget back to surplus after recording a deficit of A$48.5 billion ($42.5 billion) for the 12 months that ended June 30. Iron ore has fallen 41 percent in China this year, according to Metal Bulletin, while steelmaking coal is trading at the lowest level in six years.
The government will continue to look for savings to get the budget “on a sustainable path back to surplus,” the treasurer said. The government, which is forecasting a deficit of A$29.8 million for the current fiscal year, last recorded an underlying surplus in fiscal 2007-08.
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