Budget surplus threatened by high Aussie dollar

The federal government says the high Aussie dollar will make it harder to return the budget to surplus in two years.

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Both Treasurer Wayne Swan and Finance Minister Penny Wong are flagging the likelihood of lower tax receipts from companies affected by a dollar now above parity with the US currency.

Senator Wong said the dollar had appreciated significantly since budget forecasts were originally prepared for the May budget.

“Obviously it’s a matter of logic that when you have a higher dollar … that impacts on a range of things,” Senator Wong told ABC Radio on Friday.

“It also has an impact on government revenue.”Senator Wong refused to say whether that impact amounted to “millions or billions” of dollars.

“If the dollar is at parity, obviously you’re going to get a different set of figures that flow from that, compared to when the dollar was at 85 cents.”

The government remained “committed” and “determined” to return the budget to surplus in 2012/2013, Senator Wong said.

Mr Swan also warned of the impact the strong Aussie dollar was having on the domestic economy.

“In particular it has ramifications for taxation revenue for some of our companies because it eats away at their profitability,” he told reporters during a visit to China on Thursday.

Senator Wong said the government was committed to the strict spending limits it had imposed on itself.

“We have very strict rules, rules that limit the growth in real expenditure that does require us to take a very discipline approach to spending,” she said.

“We also have made it very clear we will offset … new spending, make sure we save what we deliver in new spending.”

The government is preparing the Mid-Year Economic and Fiscal Outlook, which will contain updated budget forecasts.

The opposition wants the government to use the opportunity to hand down a mini-budget.