Australia beats forecast with $46.7 bln deficit

Australia trumpeted its finances as among the best in the developed world after unveiling a better-than-expected budget deficit of Aus$47.7 billion (US$46.7 billion) for 2010-11. As the United States and countries in Europe struggle to rein in huge deficits, Treasurer Wayne Swan on Friday said Australia's was a modest Aus$1.7 billion improvement on their May budget forecast for the financial year. "Australian public finances are among the strongest in the developed world," Swan said after the data was released. "That's despite the impact of the global financial crisis, the devastating natural disasters earlier this year and the impact of the high Australian dollar on revenue." While Australia avoided recession during the global meltdown, the turmoil cut around Aus$130 billion from government revenues as the economy slowed markedly. But Canberra was still able to post a deficit of 3.4 percent as a percentage of gross domestic product (GDP), compared with over 10 percent in the United States and Britain, he added. The figures showed Australian net debt was Aus$84.6 billion (6.1 percent of GDP) in 2010-11, dramatically lower than the level across major advanced economies, which averaged a net debt of 75.3 percent of GDP in 2010. Swan affirmed his commitment to return to surplus within two years, but cautioned that global instability would hurt revenues and make it more difficult to achieve. "The goernment remains determined to return the budget to surplus in 2012-13, despite softer than expected revenues and increased global instability that will inevitably make that task more difficult," he said.