2 Feb 2009, 0700 hrs IST, AP
CANBERRA: Australia's government plans to break an election campaign pledge by spending its budget into a deficit this year because of the global recession, Treasurer Wayne Swan said on Monday. Swan met his Cabinet colleagues on Monday to discuss a second multibillion-dollar stimulus package aimed at curbing the economic decline. No details were immediately announced. The government has already injected 36 billion Australian dollars ($23 billion) into the economy since September, including cash bonuses in welfare checks, funds for residential mortgage backed securities, car industry assistance plus infrastructure projects. Swan had previously forecast a slim surplus this year despite the massive injection. But the worsening economic climate has eroded that. ``Certainly it means that the budget is going into temporary deficit and because of the size of this global recession and the size of the demand shock which is being transmitted to the Australian economy, it does have a fairly dramatic impact on the budget bottom line,'' Swan told Australian Broadcasting Corp. radio. ``We plan to return the budget to surplus when global conditions normalize,'' he added. Prime Minister Kevin Rudd's center-left Labour Party was elected in 2007 on a promise to maintain surpluses in the nation's annual budgets. The preceding center-right government had delivered 10 surpluses in 12 annual budgets. Late last year, the International Monetary Fund predicted Australia would be one of the few developed countries to avoid recession in 2009. But on Saturday, the IMF told Australian officials the country's economy was likely to contract by 0.2 percent, delivering Australia's first recession since 1991. Rudd responded by accusing unregulated free market economics of ``turbo charging greed.''