Australia Budget surplus 'means rate cuts'
Returning the federal budget to surplus will put downward pressure on the Australian dollar and could lead to lower interest rates, economists say. Treasurer Wayne Swan on Tuesday night handed down his fifth basket which is forecast to deliver a 1.5 billion surplus for the 2012/13 financial year. AMP chief economist Dr Shane Oliver said the government's commitment to cut spending and return to surplus would hurt economic growth and ad to the case for further interest rate cuts. "It will take a huge chunk out of the economy, we estimate around a one per cent detraction from the economy. ... (full story)