Kevin Rudd has used the 'd' word,Wayne Swan hasn't.
David Uren, Economics correspondent | November 27, 2008 Article from: The Australian AFTER weeks of denial, Kevin Rudd has admitted the federal budget is heading into deficit, blaming the deteriorating global economic outlook.
The Government is preparing a major package that would deploy much of the $29 billion it has accumulated in infrastructure, education and health funds to provide further stimulus to the economy.
The Prime Minister also flagged yesterday that the states would receive an additional $11billion at this weekend's Council of Australian Governments meeting to help fund health and education.
Returning from last weekend's APEC meeting in Peru, Mr Rudd told parliament the prospects for the Australian economy had changed since Treasury released its mid-year budget review just three weeks ago.
FULL TEXT: Statement by Kevin Rudd
"If global growth continues to deteriorate in the period ahead, consistent with the economic data that is emerging during November, then there will be a further slowing of growth in the Australian economy - as surely as night follows day."
He said the slowing growth would bring reduced government revenues.
"Under those circumstances, it would be responsible to draw further from the surplus and, if necessary, to use a temporary deficit to begin investing in our future infrastructure needs, including hospitals, schools, TAFEs, universities, ports, roads, urban rail and high-speed broadband."
