Australian PM says election-year budget 'wise'

SYDNEY (AFP) - Australian Prime Minister Julia Gillard began the hard sell of Labor's lean election year budget on Wednesday, insisting it was in the nation's interest and offered enough to see her secure another term.

Delivering the final budget before polls on Sept 14, Labor emphasised big-ticket reforms to education and disability care while stating tough choices were necessary in the face of plunging revenues.

"What you've got to do is make some choices, making room for the big investments, the wise investments that our nation needs, including education," Ms Gillard told Sky News.

She again pointed to the "big hit" suffered by the Australian economy in the face of a high dollar which saw Labor abandon its promise to produce a surplus this year, instead pushing it back to 2016/17.

"The big hit has been from the revenue writedown," she said.

"Any prime minister sitting in this chair would have to deal with that."

With less than four months until national elections and Labor badly lagging the conservative opposition in opinion polls, Ms Gillard said the budget was a responsible one that she hoped the electorate would embrace.

"Voters will make their decision on September 14. This budget is right for the nation," said the prime minister who later wept in parliament as she introduced a levy to pay for disability reforms.

The budget revealed an A$18 billion (S$22.3 billion) deficit for 2013/14 with Labor launching a A$43 billion savings drive over five years to help fund initiatives in education, disability and infrastructure.

Australian media generally welcomed the budget with the Sydney Morning Herald saying: "Treasurer has resisted the temptation to buy votes."

"Wayne Swan has delivered a face-saving, legacy-building budget that makes hard decisions to fund Labor's visions and goes a long way towards improving government finances over the medium term," it said in an editorial.

But Mr Rupert Murdoch's The Australian bemoaned that "yet again, Wayne Swan is spending more than he receives".

It said Mr Swan had provided "a plausible sales pitch to voters" but added that "given Mr Swan's failure to meet his own forecasts in the past, his predictions in this year's figures deserve tough scrutiny and a degree of scepticism".

The major hit in revenues due to the high dollar and a fall in commodity prices saw the government slash growth forecasts for 2013/14 from 3.0 percent to 2.75 percent.

National Australia Bank chief economist Alan Oster said it was: "In short, a budget that is more in line with a 'soft economy' - even if the government doesn't describe it as such."

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