Australia’s low unemployment compared with other industrialized nations and record investment make returning the budget to surplus the right strategy, Treasurer Wayne Swan said.
“With solid growth, contained inflation, very low public debt, low unemployment and a record pipeline of investment, we are the envy of virtually every advanced economy,” Swan said in his economic note yesterday. Returning the budget to a surplus during fiscal 2012-2013 is “the right strategy for an economy returning toward trend growth.”
Swan, who is preparing Australia’s budget for release on May 8, faces the challenge of balancing a drop in revenue against a government pledge to deliver a surplus in the 12 months through June next year. While the resources boom is benefiting Western Australia and Queensland, retailers and manufacturers are facing tough conditions in other states.
In the past month, Australian government reports have shown fourth-quarter GDP expanded at half the pace economists forecast, and the weakest exports in almost three years led to Australia’s first trade deficit in 11 months in January.
Mining investment in Australia, the world’s biggest exporter of iron ore and coal, is estimated to reach A$120 billion (US$124 billion) next year, an increase of around 155 percent in two years, Swan said last month.
“Claims that the return to surplus is putting growth at risk overlook the fact that the government’s budget strategy has been clear and consistent for a long time,” Swan said. “Returning the budget to surplus is our best defense and is a key sign of our strong economy.”
The Reserve Bank of Australia (RBA) held interest rates unchanged on Tuesday last week, while signaling it may resume cutting rates as soon as next month if weaker-than-forecast growth slows inflation.
Returning the budget to surplus is “the right thing to do,” Prime Minister Julia Gillard said on April 1, while pledging to support jobs. Australia has battled natural disasters, including record floods in Queensland last year, that have hampered economic activity, including tourism as well as export of coal.
CHINESE DEMAND
China is Australia’s biggest trading partner, and the RBA has said it expects Chinese demand for commodities to remain strong even as recent data painted a mixed picture of the world’s second-largest economy.
Australia has grown more dependent on resources as employment in manufacturing dropped by about 30 percent since 2007, while mining and government payrolls rose by more than 50 percent, HSBC Holdings PLC estimates.
“Maintaining our credible fiscal policy also sends a strong message of confidence to investors across the world in uncertain times,” Swan said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
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