A “really tough” Federal budget coming

Expect a really  tough Federal budget in May.

That tip comes from a usually reliable source, the Prime Minister, Kevin Rudd.

Speaking in a television interview yesterday, Mr Rudd left no room at all for doubt about that.

He had been asked if the budget would have to be tough, this year.

“Really tough,” Rudd replied.

“Because what you have got on one side of it is collapsing government revenues, coming straight off the back of the global economic recession.”

Rudd said the same thing is also happening with every other budget around the world.

“The Chinese budget has gone into deficit, I’m advised,” Rudd added.

The Prime Minister also signalled that Australia, too, is likely to slide into recession.

Indeed, figures released by the Australian Bureau of Statistics show that the country is already half-way there, with its economy contracting 0.5 per cent in the final three months of last year.

Rudd noted that the International Monetary Fund is now predicting that the global economy will contract by between 0.5 and 1 per cent this year.

He said the revision, which had produced those figures, had been a big one.

“…and therefore it does have direct roll-on consequences for Australian growth, employment and the budget,” Rudd said.

“That’s just as night follows day.”