Budget not immune to challenges: Swan

5 Sep 2012, 2:04 pm   -   Source: AAP
Federal Treasurer Wayne Swan says the budget task could be made harder by falling commodity prices. (AAP)

Federal Treasurer Wayne Swan says the budget task could be made harder by falling commodity prices. (AAP)

Treasurer Wayne Swan says the budget task could be made harder by falling commodity prices.

Treasurer Wayne Swan says the federal budget is not immune to challenging conditions in global markets, where the prices of key bulk commodities are falling.

Mr Swan was speaking on Wednesday after the release of lower than expected economic growth figures for the second quarter.

However, the Australian Bureau of Statistics report for the three months ended June was "very special" because it showed the country continued to "walk tall" in the world economy.

Australia was "leaving every other advanced economy in our wake", but there would be pressures on the budget from commodity price falls, Mr Swan said.

"While we have budgeted for a decline in our terms of trade, commodity spot prices have fallen by more than we anticipated in May," he told reporters in Canberra.

"Obviously, there would be a further hit to the budget bottom line if these lower prices were sustained.

"That will make our budget task harder."

Mr Swan said the government was committed to delivering a budget surplus in 2012/13, and had a track record of creating savings.

"I think we have a lot going for us here in Australia," he said.

"But our budget, in particular, is not immune from challenging global conditions."

The national accounts report released on Wednesday showed the economy grew by 0.6 per cent in the June quarter.

This was slightly slower than the rate economists had expected and well below that recorded in the March quarter, when the economy expanded by a revised 1.4 per cent.

However, at an annual growth rate of 3.7 per cent, the economy continued to grow comfortably above its long-term trend of 3.25 per cent.

Mr Swan said Australia had faced substantial economic headwinds in the quarter and the government was not being complacent.

"We've got the best combination of growth, healthy consumption, record investment pipeline, low unemployment and of course lower interest rates," he said.

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