Swan discards Access' budget deficit forecast
Treasurer Wayne Swan has rejected an Access Economics prediction that the budget will slip back into deficit after a surplus in 2012/13.
The independent economic consulting firm said the federal budget is at risk of returning to deficit because commodity forecasts are too optimistic. It forecasts a deficit of $1.8 billion deficit in 2013/14 as it does not think the strength of commodity prices that are supporting the budget return to surplus is sustainable. Treasury predicts $4.5 billion surplus in 2013/14.
"Access Economics tend to be professional pessimists about future growth in the region, in particular for China," Mr Swan told ABC Radio.
Treasury could be right that there is a permanent boom in mining, but it would be the first ever recorded in any market, according to Access director Chris Richardson.
He said the demand surge out of emerging economies so far has exceeded the increase in global mineral supply, providing continuing strength for commodity prices, and a lift to Australian revenues.
"But if the emerging economies take a temporary tumble, or if the world's miners dig deep enough to start to catch up with the burgeoning demand of China and India and others, then the budget will look very little like it does today," Mr Richardson said.
Trade Minister Craig Emerson said budgets are put together on the basis of Treasury forecasts, not Access Economics.
"We are relying as we should and must on Treasury forecasts for commodity prices," he told Sky News.
Access did confirm the budget would be in surplus in 2012/13, which will mean Australia is the first major advanced country to return the budget into surplus, Dr Emerson said.
Access predicts a surplus of $3.8 billion in 2012/13 compared with Treasury's forecast of $3.5 billion.