Australia budget surplus less than A$10 billion

The Australian government on Sunday rejected reports that it would hand down a bumper A$10 billion ($7.9 billion) surplus in its national budget in May, saying the surplus would be in line with earlier estimates. "The budget is strong, it is in surplus," Finance Minister Nick Minchin said. "(But) I would reject ... that we've got a A$10 billion surplus coming," he said. "We have no evidence of that." Minchin said the government was standing by its mid-year outlook.
The Treasury Department forecast in the Mid-Year Economic and Fiscal Outlook, released in December, a surplus of A$6.2 billion for the 12 months to June 30, 2005, a surplus of A$4.5 billion for 2005/06 and A$5.7 billion for 2006/07.
Speaking on Channel 10's Meet the Press programme, Minchin said on Sunday that a budget surplus was important to keep pressure off interest rates.
The Reserve Bank of Australia raised the official cash rate to 5.5 percent from 5.25 percent in the week before last, the first rise since consecutive moves in November and December 2003.
Markets see a risk of a second increase soon but government leaders have questioned the need for a further rate rise.
Australian Treasurer Peter Costello will hand down his tenth budget on May 10.
Prime Minister John Howard said on ABC TV's Insiders programme on Sunday that Australia's economy was "slowing a bit".
"(But) it's ridiculous to say that it's hit a speed bump or it's hit the wall or anything like that," he said. "I see the Australian economy as still very strong and likely to remain so." Meanwhile, on the looming sale of the Australian government's 51.8 percent stake in national telco Telstra Corp Ltd, worth about A$33 billion, Minchin said on Sunday that the government would use the proceeds to continue to retire debt and to "look at acquiring other income-producing assets" to ensure that the budget was not affected by the sale.
"If the government is going to have investments, then it should have a spread of investments that produce income to help taxpayers and help provide the services that taxpayers want," he said, without giving examples.