Government switches focus back to economy

Treasurer Wayne Swan has trumpeted Labor’s strong fiscal credentials as the government moved to switch attention to the economy amid speculation an election may be called this weekend.

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The prospect of a $3 billion surplus in three years’ time provides a timely backdrop for Julia Gillard’s first address to the National Press Club as prime minister on Thursday.

However, it brings no relief from criticism and uncertainty over the government’s asylum seeker policy, with Immigration Minister Chris Evans reportedly conceding the issue was “killing” Labor.

In releasing the economic statement on Wednesday, Mr Swan said Australia was still on track to return to surplus within three years with a bottom line $2 billion healthier than forecast in the May budget.

The surplus is now expected to be $3.1 billion in 2012/13, larger than the $1.0 billion anticipated in May, mainly underpinned by an extra $7.8 billion in unexpected tax revenue.

“This means Australia will be back in the black ahead of every single major advanced economy,” Mr Swan said.

The figures showed economic growth had been revised down slightly to 3.0 per cent in 2010/11 and 3.75 per cent in 2011/12, compared to 3.25 and 4.0 per cent respectively forecast in the budget. However, unemployment is expected to continue to fall.

Mr Swan said the updated numbers backed the government’s economic record, adding that Labor’s reforms and its management of the economy would help secure the nation’s future prosperity.

“The numbers that I’ve reported today I think do underscore the success of our strategy to manage the budget responsibly and to strengthen and to secure our economy for the future,” Mr Swan said.

The release of the figures boosted speculation Ms Gillard could call an election as early as this weekend. While refusing to speculate on the election timing, Mr Swan warned voters not to expect too much in terms of spending promises during the election campaign.

“I don’t think there’s going to be that much room for election sweeteners whenever the election is going to be,” he told Sky News.

But the improved economic outlook came as the government continued to face questions over its asylum seeker policy and plan for East Timor to become regional refugee processing hub. Immigration Minister Chris Evans reportedly commented at a conference on Wednesday that the debate over asylum seekers was “killing the government”.

Fairfax Radio Network said the minister made the comment at a conference hosted by the University of NSW.

Senator Evans also reportedly said that managing the debate on immigration had been one of his greatest failings as minister and that the issue had become toxic.

The network did not air audio of the remarks. In a statement released later in the day, Senator Evans softened his comments, saying the issue of asylum seekers had been a difficult one over the past few years.

“The debate has changed substantially since Julia Gillard became prime minister and seized the opportunity to confront the issue and speak honestly and frankly with the Australian people,” Senator Evans said.

Opposition immigration spokesman Scott Morrison said the comments showed the government was more interested in spin than effective policy.

“It is Labor’s policies that have failed, not their message nor their messenger,” Mr Morrison said.

The government on Wednesday said it remained committed to its plan for East Timor to host a processing hub, despite an offer from Nauru to consider reopening a detention centre.

Nauru President Marcus Stephen said his government was willing to consider signing the refugees convention if it would advance Ms Gillard’s plan but no approach had been made by Australia. “Naturally, we would consider any request for assistance either on this matter or any other issue,” he told the Macquarie Network.

“There has been no official or formal request or discussions from the Australian government.”

Labor has so far has ruled out reopening Nauru on the grounds that unlike East Timor, the tiny Pacific nation was not a signatory to the UN convention on refugees.