CANBERRA: Australia's struggling Labour government on Tuesday used the last budget before national elections to delay a long-promised return to surplus, blaming a stubbornly high Australian dollar and lower commodity prices for a dramatic fall in revenues.
With polls pointing to a solid defeat for Prime Minister Julia Gillard at elections set for Sept. 14, Treasurer Wayne Swan locked in 10 years of funding for landmark disability and school education policies aimed at reversing its downward trajectory, and committed more money to roads and suburban rail projects.
But the budget, with little room for traditional pre-election give-aways and with voters traditionally wary of government borrowing, was unlikely to do much to help revive support.
Instead, Swan has cut a range of benefits to middle-income families, putting off planned tax cuts, increasing a health levy on income, and scrapping a A$5,000 ($5,000) baby bonus popular with voters and which had helped address an aging population.
Swan defended the cuts as measured and balanced, and said the decision to abandon the surplus was right for the economic circumstances.
"To those who would take us down the European road of savage austerity, I say the social destruction that comes from cutting too much, too hard, too fast is not the Australian way," Swan said.
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