The Australian government said it remains on target to return the budget to surplus in the next fiscal year despite the European debt crisis slashing revenue by AUS$20bn (US$20bn) a year.
The government announced in its midyear budget update today that the deficit in the current fiscal year which began on July 1, 2011, will be a higher than expected AUS$37bn.
When the budget was released in May, the deficit was forecast to reach AUS$22.6bn.
Treasurer Wayne Swan said that with new saving measures, the government will deliver a narrow surplus of AUS$1.5bn in the next fiscal year – two billion Australian dollars less than forecast in May.