The federal budget deficit reached $43.7 billion by the end of financial year 2011-12, Treasurer Wayne Swan said on Monday, slightly improving from the forecast that the Treasury had provided in May.
The underlying cash shortfall as of June was $661 million better from the estimates that the government had issued two months before the conclusion of the last financial year, Mr Swan noted.
"This is the smallest variation between the budget estimate and the final outcome for a decade," the treasurer was quoted by the Australian Associated Press (AAP) as saying in his talk with reporters today.
The deficit, Mr Swan said, is attributed on softening commodity prices since last year, adding that price levels of the prime Australian exports will likely "remain substantially lower than what we factored into our budget forecasts."
While Australia enjoyed solid wages and employment growth in the last fiscal year, as shown by the period's tax revenue boost of about $473 million, the country's tax collection also absorbed "a hefty fall of $876 million in company tax receipts due largely to lower corporate profits," Mr Swan said.
The 2011-12 deficit was roughly three per cent of the country's gross domestic product (GDP) while the nation's net debt, at $147.3 billion, was at around 10 per cent of the GDP, the Treasury said.
Notwithstanding, Mr Swan stressed that "Australia's fiscal position is much healthier than most other developed economies."
"Our 2011 deficit is less than half the average budget deficit recorded for the major advanced economies in 2011," Bloomberg quoted him as saying on Monday.
The figures also meant that "this will hit government revenues significantly, which does make it harder to deliver a budget surplus," Mr Swan admitted.
"So it does mean we will have to find more savings ... But we do have a proven track record of finding responsible and measured savings in accord with Labor values, and we'll do that again," the treasurer was reported by The Australian as saying.
More saving means further cutbacks in spending, the government said, assuring too that earlier declared policies - wage subsidies, parental leaves, disability insurance and educational reforms - will be funded as pledged.
"We've had big revenue writedowns and of course there are challenges to the revenues, but we will absolutely stick with our fiscal discipline and as we put in place responses to new challenges," Mr Swan told reporters in Canberra.
Labor, however, is mum on the likelihood that targeted savings would force federal authorities to trim down the bureaucracy.
In an interview with ABC today, Finance Minister Penny Wong said government rollbacks on expenditures will likely focus on "non-staffing areas," of its operations.
As much possible, job losses will be avoided by reducing budgets on non-essential items such as travel and equipments, Senator Wong said.
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