Running Head ASSIGNMENT

The Federal Budget

The Federal Budget

Introduction

The federal budget is a key instrument of government fiscal policy, Australian Federal Budget of 2012-13 was announced by Treasurer, named Mr. Wayne Swan, federal budget was announced on 8th May. This summary of Federal budget will focus on key areas and major negatives and positives of federal budget. Treasurer defined the budget as a driving force of Australia for delivering stronger economy, which will help in gaining benefits of mining boom, shared with all Australians on fairly basis. Australian Federal budget had an impact of global financial markets tension, which took place in early times of 2012, whereas after the time of severe instability during late 2011, many other significant downside risks took place and affected the economic outlook globally. Specifically, advance economies still faces challenges for generating sustainable growth levels, whereas at the same time economies are trying to allocate finances effectively. Global economy has faced many structural changes, as these changes have affected the weight of economic activity, moving towards Asia. Although, Federal budget can help Australia to adapt the resulting changes taking place in global economy. Moreover, these changes can be opportunistic for Australian economy; it will turn into lasting prosperity for Australia over long and medium term. Australia economy has continuously suffered from changing and fragile nature of global economy, moreover Australian success was depending on the jobs and economy during financial crisis. Australian economy faced transition process, from strong position.

Economy of Australia witnessed an increasing trend, as this increase was very higher as compare to level of output during pre crisis time. On the other hand, output has consistently performed strong against the uncertain and weak global backdrop. Federal have focused on economy, whereas current trend of Australian is concerned it has grown substantially, which have turned into a healthy prospects for medium term firms. It has continuously increased the strength of business investment. Specifically the resource sector, it has continuously expected to increase the overall growth in economy (Fickling 2012).

In federal budget several initiatives have taken, which will result in the strong growth of the resources, as this strong growth will indirectly or directly supports the level of growth in various parts of an Australian economy. On the other hand, challengers in some parts of economy will remain exist, as these challenges faces global conditions, which is not easy to settle. Australia federal budget faced a surplus as the higher Australian dollar rate and continuous consumer caution have changed the patterns of expenditure; this higher expenditure had adverse effect on some sectors of Australia. The Treasurer has had the unenviable task of choosing between multiple deserving reforms, while delivering a $1.5 billion budget surplus in the face of plummeting tax receipts.

In terms of the broader economic narrative, the return to budget surplus is intended to demonstrate the Australian economy's full recovery from the global financial crisis. But the economic data shows the limitations of this recovery. Many industries continue to experience slow growth, and certain regions, ...