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Australia PM rules out early election as budget sell begins

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Australian Prime Minister Tony Abbott ruled out an early election Wednesday as he embarked on a budget sell, as opponents accused the government of delaying fiscal repair to win votes.

[SYDNEY] Australian Prime Minister Tony Abbott ruled out an early election Wednesday as he embarked on a budget sell, as opponents accused the government of delaying fiscal repair to win votes.

The conservative administration's second budget on Tuesday shifted the focus away from reining in a huge deficit after harsh cuts to health and education last year triggered a backlash and a challenge to Abbott's leadership.

Instead, treasurer Joe Hockey focused on making childcare more affordable and boosting small businesses in packages totalling A$10 billion (S$10.64 billion), while largely avoiding the swingeing cuts that damaged the government's popularity in 2014.

Analysts said it was a budget to encourage spending and stimulate growth, while delaying a return to surplus until 2019-20 - something Abbott pledged to achieve during its first term in office.

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The Australian broadsheet ran a front-page headline that read "Leaning towards a poll", as several politicians also suggested the friendlier budget was a sign the government was preparing for an early election.

"I think the government is leaving their options open to go to an election by the end of this year," said independent senator Nick Xenophon.

Polls must be held before January 2017 but Mr Abbott insisted the government always planned to run a full term as he did the rounds of television and radio stations to pitch his plans.

"That is what the people of Australia elected us to do - to govern the country as best we could, to deliver on our commitments as best we could, for a full three years," he said.

"We always had to make some tough decisions," he added. "We made some very tough decisions last year and this year's budget is building on last year's budget and it is building for next year's budget."

Labor opposition leader Bill Shorten said the budget "failed the test of the future" by not doing enough to bring down the deficit.

"What I'd say is this is a budget aimed at saving one person's job, Tony Abbott's. What I couldn't call it is a budget for the future," he said.

"Last year they were talking about debt in almost hysterical terms. This year they're now almost hysterical with the excuses why debt isn't the issue that it was last year."

The budget forecast a deficit of A$35.1 billion, or 2.1 per cent of GDP, in 2015-16, below analysts' expectations, despite a huge hit to revenue driven by an almost 50 per cent fall in the price of iron ore - Australia's biggest export.

Australia has struggled to rebalance the economy away from a dependence on mining and analysts said the budget measures were "fairly benign".

"Given the political problems of last year's budget, much focus has been placed on attempting to make this budget as politically saleable as possible," said National Australia Bank chief economist Alan Oster.

AFP

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