Surplus 'possible' if economy delivers

Confident ... Craig Emerson.
Confident ... Craig Emerson.

THE Trade Minister, Craig Emerson, says a surplus this financial year is still possible, despite the admission last week by the Treasurer, Wayne Swan, that it was unlikely Labor would be able to deliver on its promise to balance the budget.

''I have not ruled out, and nor should anyone rule out the possibility of a surplus in 2012-13,'' Dr Emerson told Sky News.

''There are good things going on in the economy,'' he said, citing an improving outlook in car sales, housing and retail.

''I'm not saying a surplus looks likely in 2012-13, but nor should that throw us off the path of pursuing a surplus.''

Dr Emerson said the budget would return to surplus in 2013-14 if these positive trends were sustained.

''So long as the economy continues to improve we would get a surplus next year,'' he said.

Mr Swan last week said the government would not dramatically cut services to fill a hole in the budget caused by lower than expected tax receipts, and therefore the budget was unlikely to return to surplus in 2012-13.

He would not say when the budget would return to surplus.

The Opposition Leader, Tony Abbott, said the admission was a breach of trust and likened the surplus pledge to Julia Gillard's promise before the 2010 election not to introduce a carbon tax. Mr Abbott said there would be a budget surplus in every year of a Coalition government, but qualified this commitment by saying it was based on current economic figures.

In his weekly economic note on Sunday, Mr Swan said Australia had one of the strongest budget positions in the developed world.

''We have solid growth, low unemployment, contained inflation, lower interest rates and record levels of investment,'' he wrote.

''There's a danger we get dragged down by a pessimism that dismisses our achievements and sells our country short.'' He said he hoped the public debate next year would better reflect the optimistic spirit of the Australian people.

This story Surplus 'possible' if economy delivers first appeared on The Sydney Morning Herald.