In an attempt to restore fiscal balance, the Australian government plans to cut its spending to cope with the recent rise in the Australian currency, Treasurer Wayne Swan said today.

Before the Parliament meeting tomorrow, Mr Swan announced that there might be substantial cuts to the government budget as the nation still grapples with the impact of the natural disasters and its top importer Japan also slashes its expenditure.

"We need to restrain spending and return to surplus in 2012-13 so we're not adding to the pressures that come from the mining boom," Swan said yesterday in his weekly economic note. "Our fundamentals are strong, with low unemployment, record terms of trade and a huge pipeline of investment in the resources industry."

The Australian government, although it has battled the financial crisis strongly, has been battling low favourable margins from citizens and industries as it mulls on slapping new taxes on the influential mining sector and a carbon emission tax.

Mr Swan, who is also looking at a new budget numbers as the fiscal year ends in June, is targeting a lowered welfare allocation for high income earners with health insurance and in spite a planned cut of about 1,000 jobs in the civilian defence industry in the next three years.

Skilled migration

Part of the government plan led by Prime Minister Julia Gillard is to create some 500,000 jobs that would lower Australia's unemployment rate to 4.5 percent from 4.9.

"The most important thing to note is that net overseas migration in this country has come down dramatically," Mr Swan, 56, told reporters in Canberra today. "We will put forward in the budget, our estimates for the future."