Julia Gillard softens language on promise to return to surplus by 2013

• UPDATED Joe Kelly
• From: The Australian
• August 12, 2011 3:31PM

JULIA Gillard has given the government further wriggle room on its return-to-surplus deadline, describing it as an "expectation".  

A day after Treasurer Wayne Swan described the pledge as an “objective”, the Prime Minister softened her own language on the once rock-solid commitment.

“Standing here I can certainly say to you it's our expectation the budget will return to surplus in 2012-13,” she said in Perth.

She signalled the recent international turbulence would alter the government's economic forecasts, which would be reflected in the mid-year economic review due out later this year.

“What we do is we update economic forecasts at budget time and also at the time that we publish the mid-year economic and fiscal outlook,” Ms Gillard said.

“We're not immune from what's happening in the globe, we've seen events in recent weeks. Obviously we take those into account.”

Finance Minister Penny Wong also appeared to water down the surplus commitment today, using the word “plan” to describe the government's 2012-13 timetable.

“The government has been very clear about why we want to return the budget to surplus in 2012-13. Of course the international situation makes it harder, but our plan remains a return to surplus as we've outlined,” she said.

The change in government language comes amid growing calls for the government to abandon the surplus deadline to help the nation ride out the unfolding economic storm.

The International Monetary Fund along with leading economists, including former Reserve Bank board member Warwick McKibbin, have called the government to reconsider its pledge to return to surplus in 2012-13.

The Greens have also opposed the setting of an artificial target to return to surplus, giving the Prime Minster license to abandon her pledge in light of international economic instability.