7 May 2012

Australian budget preview

6:58 am on 7 May 2012

The Gillard government presents its annual budget in Canberra on Tuesday evening.

Expectations are that it will deliver on its promise to restore the fiscal balance to surplus, but Radio New Zealand's Sydney correspondent reports there is some scepticism about the value of this exercise.

The federal budget used to be a major event for financial markets. These days it's more of a political document.

This year the focus is on just how Labor will make good on its promise to restore the budget to surplus.

It seemed a good idea three years ago. But with growth slowing, Radio New Zealand's correspondent says it's arguable whether this is a good time to be withdrawing stimulus.

Some measures have been flagged already: scaling back of tax breaks on superannuation and cuts in defence spending.

The real question is whether the federal government can credibly deliver on its surplus promise without further intensifying the slowdown in key sectors such as manufacturing, retailing and housing

Delivery of the budget is due to begin at 7.30pm (AEST) on Tuesday.