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ABC News Breakfast -

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(generated from captions) Returning to the Federal

Returning to the Federal

Budget now and it is expected

to record a $60 billion deficit

next week. The Federal

Treasurer Wayne Swan joins us

now from Canberra. Good morning and thank you for joining

us. Good morning. I know you

won't speculate about the size

of the deficit, that's to be

revealed next Tuesday night

when you rise to your feet in

Parliament, but we have

confirmation that we will be in

deficit for potential six

deficit for potential six years. When you and I last

spoke about this, Wayne Swan,

you said it was OK for your

Government to stay in deficit

for the cycle, this period of

the economic cycle. So you are

saying the economic cycle now

runs in six year lots? Well,

what I'm saying is there has

been a dramatic escalation in

dramatic impact the global recession having a

dramatic impact on Government

revenues. We're writing down

something like $200 billion

worth of Government revenue

over the forward estimated.

When we made our last forecasts

in February, that figure was

around $115 billion. Government

revenues have been hit by this

dramatic cracks that has

occurred in a global economy

again in the March quarter on

December top of what has occurred in the

December quarter. That is what

the Government is dealing with

and why we will have a

temporary deficit longer and

higher than previously

anticipated. But at this time,

given the sharp contraction in

the economy, the responsible

thing to do is to have a

deficit to support jobs while

at the same time taking some

tough decisions to make room

for our commitment to

pensioners and to invest in the

place those future. But also putting in

place those long-term savings

that put the Budget on a

sustainable footing in the

longer term and help return it

to surplus as we go through the

cycle. Wayne Swan, I don't think anyone would argue that

clearly circumstances have

shifted and shifted dramatically from six months

ago to a year ago of course.

But you understand and I'm sure

you will accept that all politicians, including

yourself, you have to be held

to your own words and you would be doing the same thing

be doing the same thing with

the Opposition. That was your

phrase, "It's OK to be in

deficit over the period of the

economic cycle". Is that cycle

six years now Wayne Swan? The

Government will be outlining a

very clear plan to return to

surplus. But the cycle is

entirely dependent upon what is

happening elsewhere in the

world. So the cycle is what it

is? Well, the cycle has been

collapse in lengthened by the dramatic

collapse in demand globally.

What we will do is outline a

very clear plan to return the

Budget to surplus, to provide

economic stimulus in the

short-term to support jobs.

That is the responsible thing

to do. To make room in our

Budget to meet our commitments

for pensioners. That will mean

tough decisions to provide for

essential investments in the

future and to make long-term

savings so the Budget is

sustainable. Of course those long-term savings will mean

that all Australians will have

to do their bit on Budget

night. Logically speaking you

are not talking about a

sustainable Budget if you talk

being a deficit that runs for a

long period of time. We are entering yes minister

territory. We are not and I beg

to differ. Let me quote back to

you. I would like to get a

response it means a temporary

deficit for a longer period of

time. That is

time. That is nonsense. No

it's not nonsense. We will

outline a very clear plan to

return the Budget to surplus

once growth returns to trend.

But we are impacted like every

other country in the world, dramatically by the collapse in

global demand. Why keep using

the term temporary. Stick to

your guns and say yes, it is a

deficit for a period of time

and we have to cop it. Well,

because we have a very clear

because we have a very clear

plan determination to return

our Budget back to surplus in a

responsible way and make sure

it is sustainable for the

long-term. Nobody likes running

deficits of that size. Nobody

likes running them for a longer

period of time, but those are

the circumstances that have

been imposed upon this country

by the rest of the world and we

have to deal with them in a

responsible, realistic way. This is a very

This is a very complex situation. This country is

being impacted upon by forces

globally. We have to respond to

that and we are doing that in a

frank, open and honest

way. Wayne Swan, we only have

1.5 minutes left before the top

of the hour, but do you hold any fears about the intrits

that you are going to have to

pay on the debts that the

Government is building up? No,

have I don't. I believe that we will

have sustainable levels of

debt. I believe that we can put

in place a clear plan to move

back to surplus once global

growth and growth returns to

trend. That is our objective. I

believe that will be accepted

by markets because countries

around the world are facing the

situation. We are far better

placed than just about every

other developed country in the

world to deal with this problem. Our levels

problem. Our levels of debt are

nothing compared to levels of

debt of most other advanced

economies. Wayne Swan, good

luck for next Tuesday night.

I'm sure we'll speak about that

time again. Thank you. It

sounds like they will be

sticking with the temporary

deficit description. It is a

remarkable line. I repeat it

for you, "A temporary deficit

for a longer period of time." I

minister would be pleased think the authors of yes

minister would be pleased with

that. Stick with us on ABC News Breakfast. Still ahead - we'll

speak to policy analyst Jessica