Swan says Budget deficit could be a way out

By: Chris Smith


Australia's Federal Budget could back-slip into deficit as the Rudd Government attempts to weave a way through the current world

Australia's Federal Budget could back-slip into deficit as the Rudd Government attempts to weave a way through the current world economic crisis.

Federal Treasurer Wayne Swan says a further slowdown in the world economy has prompted the Government to consider pushing the Budget into deficit.

Today Prime Minister Kevin Rudd admitted for the first time that the Government might have to push the Budget into deficit as it tries to spend its way out of the worst of the global financial crisis.

He said revenue levels were likely to be affected.

"We think we will take a further hit if growth continues to slow," he said.

"So what we are saying is that deficit at the moment is not necessary, but we most certainly don't rule it out.

"The downturn will be much more pronounced if we don't act. And what we're saying is, it would be irresponsible not to go into deficit if in fact the slowdown was so pronounced.

"What we need to do is to avoid the slowdown by making the investments to protect the economy and to protect jobs."

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