By Sam Collyer
Federal treasurer Wayne Swan, in delivering his second budget, said Australia’s deficit would reach $57.6 billion in 2009-10. It would take six years to pay off the debt.
Next year’s deficit represents a record 4.9 per cent of gross domestic product, but the Federal Government said it was unavoidable given the nation stands to lose $210 billion in tax revenue as a result of the global economic crisis.
The Government proposes to spend up big on infrastructure in a bid to stimulate the national economy, despite projections that net debt will balloon to $188 billion by 2013.
Roads and passenger rail were the biggest winners in a flood of infrastructure commitments from the under-strength Building Australia Fund (BAF), which has less than half the $20 billion it had been budgeted to allocate.
The government will spend $8.5 billion on road, rail and port infrastructure, much of it already announced.
Some projects will be given only a minimal amount, with the States to make up the difference, while at least one other key freight rail project was put on the backburner.
About $4.6 billion is to be spent on passenger rail projects alone and $3.4 billion on the national road network which includes the Pacific, Hume and Bruce highways.
Swan also outlined at least $389 million in port-related spending targetting Darwin and the long-awaited iron ore port at Oakajee in Western Australia’s Midwest region.
Gross domestic product is expected to fall by 0.5 per cent, recovering in 2010-11 with the budget expected to return to surplus in 2015-16.
 
 
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