15 Aug 2011

Pressure on Australian govt over federal surplus

7:08 am on 15 August 2011

Global economic and market uncertainty is putting pressure on the Australian government to drop its promises of a return to surplus within two years.

The government has pledged itself to returning its budget to surplus by the next federal election, due two years from now.

But economists and business leaders are increasingly urging it to allow for some flexibility, given the worsening global economy and deteriorating revenues.

Even, the IMF in its latest report on Australia sanctioned a delay in a return to the black if circumstances worsen.

Radio New Zealand's Sydney correspondent says the problem is the surplus promise has become more of a political promise than an economic one.

And that means the government has boxed itself into a corner, unable to allow further stimulus without being damned for going back on a promise it should never have made in the first place.