Australia registered on Friday a budget deficit of $46.4 billion (A$47.7 billion) for the year ending June 30, 2011. The gap is 3.4 percent of the country's gross domestic product (GDP).

The deficit is lower by A$1.6 billion than the government forecast of A$49.4 billion deficit in May.

Treasurer Wayne Swan said the smaller deficit is because of lower cash payments of A$3.6 billion, which went beyond a A$2 billion shortfall in cash receipts. He said the budget gap is only half of the European Union's deficit in 2010 as a proportion of GDP and one-third of the U.S.'s.

"This is dramatically lower than the level across major advanced economies, which averaged a net debt of 75.3 per cent of GDP in 2010," Bloomberg quoted Mr Swan.

Australia's net debt was A$84.6 billion or 6 percent of the 2010-11 GDP. The country's economy contracted 0.9 per cent in Q1, but GDP went up 1.2 per cent in Q2 as Australia started to recover from the Queensland flooding.

"Australian public finances are among the strongest in the developed world.... That's despite the impact of the global financial crisis, the devastating natural disasters earlier this year and the impact of the high Australian dollar on revenue," added Mr Swan, Euromoney magazine's finance minister of year.

He assured Australians that the government is committed to return to a budget surplus in 2012-13 despite softer-than-expected revenues and increased global instability that makes returning to balanced books more difficult to achieve.

Reaching that goal is vital to the political survival of the Labor-led government because 2013 is an election year. Polls have shown that the party is in danger of losing to conservative opponents because of Australians' concern over government deficit spending.

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