Speculation Mounts Ahead of Australian Budget Unveiling

“Has Tony Abbott gone mad?” one newspaper screams, while another queries: “What budget emergency?”

These headlines are just some of the running commentary that has come out ahead of Australia’s much-anticipated budget, which is to be announced on Tuesday.

It is expected to contain some of the harshest spending cuts in years as the newly elected conservative government led by Prime Minister Tony Abbott attempts to balance the nation’s books.

Tax hikes for the rich, cuts to welfare and the raising of the retirement age to 70 are expected to be included in the latest economic blueprint.

On the other side of the ledger, massive nation building infrastructure projects are likely to be announced.

Overall though, the government is looking to save billions of dollars to tackle Australia’s ballooning budget deficit, which is forecast to reach 123 billion Australian dollars ($115bn; £68bn) over four years.

Australia has a budget deficit of around 3% of gross domestic product (GDP), while public debt is less than 20% of GDP.

That is far less than what Greece, the United States and much of Europe have wrestled with in recent years.

However, in a resource-rich country that had got used to running a surplus in the years up until the financial crisis hit, it has become a source of concern, and Mr Abbott has indicated that all Australians will have to share the pain to guarantee future prosperity.

via BBC

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