CANBERRA - Australian Treasurer Peter Costello last night announced a budget designed to use continued economic strength to slingshot the nation into the next century through the development of new high-tech industries, an increasingly skilled workforce and an accelerated drive into world markets.
Although hampered by Senate resistance totax reform and the sale of the state-owned Telstra telecommunications group, Mr Costello's budget was heavy on science, aid for small business, education and training.
With the economy expected to grow by 3 per cent in 1999-2000, and a budget surplus of more than $A5 billion, Mr Costello also announced additional spending for employment, Aborigines, health, aged care, social welfare, regional development and the environment.
Despite warnings of significant risks for the global economy - particularly in Japan, and through the reform process in east Asia - the Treasury expects world growth to strengthen to about 2.5 per cent next year.
Although easing later this year, the Australian economy will still be stronger than most in 1999-2000, with continued employment growth and slightly higher inflation of about 2 per cent.
The current account deficit is also expected to ease slightly to about 5.25 per cent of GDP as the international economy improves, commodity prices stabilise and import prices remain under pressure.
Apart from international uncertainties, the main dangers for Australia lie in the volatility of business investment and the possibility that consumer spending may be curbed by rising household debt and increased personal savings.
But Mr Costello, after again urging the passage of his tax reform package as a means of erasing federal debt and fuelling the economy, described his budget as right for the times.
"We wanted to frame a budget which would set us up to enter the next century much as we entered this one - a world leader in living standards, prosperous, free, and with all the potential of a dynamic young nation."
