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  • Australian Finance Department Urges Spending Cuts

    Published on October 2, 2010

    Australia’s Finance Department on Saturday warned the Federal Government its plans to achieve a budget surplus by the 2012-2013 financial year are at risk without cuts to spending.

    In its briefing papers to the incoming minister, the department said the Government would need to find additional savings and restrict new spending.

    According to Fairfax news, the incoming brief to new Finance Minister Penny Wong said the government needs to find 2.4 billion dollars (1.9 billion U.S. dollars) in savings over the next four years just to pay for the pledges, which made during its negotiations with the cross-bench independents, including the promised new 1.8 billion dollars (1.7 billion U.S. dollars) program for rural hospitals.

    The department warned the Australian economy is not immune from the downside risks of the global economy, and said the persistent threat of a double-dip global recession strengthens the case for rapid action.

    It suggested the government needs to build a fiscal buffer to protect against further negative economic shock, singling out retiree benefits, health and defense spending as areas where savings could be found.

    Meanwhile, Senator Wong said the government was “absolutely committed” to its strict spending limits.

    “The government will work with the new Parliament to deliver this fiscal strategy in the national interest,” Fairfax news quoted her as saying.