Fed: Budget spending curtailed by Reserve: Access

AAP General News (Australia)
04-04-2005
Fed: Budget spending curtailed by Reserve: Access

A leading economic forecaster says the federal government will be unable to produce
a big spending Budget because it will force a rise in interest rates.

In its latest business outlook, Access Economics says the boon in commodity prices
is delivering Canberra a strong flow of tax receipts.

But the group says even though the government has a surplus, it won't be able spend
it because of Reserve Bank fears there's already too much demand in the Australian economy.

Access Economics also says the government's bottom line will also be under pressure
soon when money flowing in from the good prices mining products are getting comes to an
end.

The forecaster says apart from fulfilling election promises, there will be little in
the way of new headline grabbing spending in the May 10th Budget.

AAP RTV sw/ea/psm/

KEYWORD: BUDGET06 (CANBERRA)

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