Australia Estimates Budget Surplus

Marcus Jacob
08 May, 2012
New York City

Australian budget estimated cash surplus of 0.2% of GDP in the fiscal 2013 as the government attempts to spread the benefits of mining boom to low and middle income families. The budget is expected to return to small surplus of $1.5 billion after four years of deficit.

[R]8:00 PM Sydney – Australian budget estimated cash surplus of 0.2% of GDP in the fiscal 2013 as the government attempts to spread the benefits of mining boom to low and middle income families. The budget is expected to return to small surplus of $1.5 billion after four years of deficit.[/R]

Australian indexes edged higher ahead of the federal budget and political uncertainty in the euro zone.

After the close, Treasurer Wayne Swan released the latest budget that estimated $1.5 billion of cash surplus in the next fiscal year after four years of deficit.

The budget calls for spending cuts for the first time in 42 years, increase government debt ceiling to $300 billion from $250 billion and aims to spread the mining boom to help low and middle income families through increased payments to families.

Treasurer Swan estimated government revenues in fiscal 2013 to total $368.8 billion and spending of $364.2 billion netting a surplus of $1.5 billion. The budget is estimated to yield a surplus of 0.2% of GDP after showing actual deficit of 2.7% in fiscal 2011 and estimated deficit of 2.8% in fiscal 2012.

The ASX 200 index edged up 13 to 4,314.30 and All Ordinaries index gained 14.33 to 4,375.90.

The Australian dollar drifted but traded at US$1.013 but near the four-month low.

The Australian trade deficit more than doubled to $1.587 billion in March compared to the deficit of $754 million recorded in February, according to a report released by the Australian Bureau of Statistics today.

Stock Movers

Telstra closed 6 cents higher to $3.62 as investors chased the telecom operator for the second week in a row.

David Jones Limited fell 2 cents to $2.38, Harvey Norman Holdings closed up 3 cents at $2.00 and Woolworths decreased 9 cents to $26.50.

Myer added 1 cent to $2.34 and Kathmandu edged up 1 cent to $1.32. Billabong International Limited rose 1 cent to $2.40.

Centro Retail Australia was in a trading halt as market anticipated a settlement on $200 million class action lawsuit.

BHP Billiton increased 11 cents to $34.68 and Rio Tinto advanced 26 cents to $62.26.

Lynas Corporation Limited inched up 1 cent to $1.03 and Iluka Resources tumbled $1.94 or 12.1% to $14.01 after the mineral sands miner said it plans to cut its annual production of zircon on uncertain global demand.

Newcrest Mining dropped 23 cents to $25.12 and Kingsgate decreased 7 cents to $5.92.

Oil Search Limited rose 2 cents to $7.14 and issued positive outlook for the company and Santos Limited fell 2 cents to $13.07.

OneSteel declined 4.5 cents to $1.18 and shareholders approved the company name change to Arrium.

Westpac Banking Corporation closed up 11 cents at $22.83 and Commonwealth Bank of Australia added 2 cents to $52.08. Bank of Queensland rose 3 cents to $6.87. ANZ edged up 1 cent to $23.11. National Australia Bank slipped 8 cents at $24.63.

Stockland increased 3 cents to $3.23 and Leighton declined 23 cents to $19.02 after the construction firm said the completion date for the toll road linking Brisbane Airport may be delayed by two more days.

Qantas unchanged to $1.53, Virgin Australia inched up 1 cent to 41 cents and Flight Centre advanced 16 cents to $20.04.

QR National gained 5 cents to $3.56.