The federal budget has taken a $40 billion hit as a consequence of the global financial crisis, Wayne Swan has revealed.
“Tax receipts are expected to be around $40 billion lower over the forward estimates than anticipated at the time of the May budget,” Mr Swan said in a statement today.
Mr Swan also warned that the government expected real GDP growth to be 0.75 per cent lower than expected at two per cent and said the unemployment rate was forecast to rise to five per cent by the June quarter 2009.
Despite this Mr Swan said the government maintained a budget surplus projection at the mid-year review, albeit a much smaller one than originally forecast in May this year.
The government is now budgeting for a surplus of $5.4 billion, compared to $16.3 billion six months ago.
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