IMF endorses return to surplus: Treasurer

21 Sep 2012, 10:34 am   -   Source: AAP
Mr Swan denied he was painting a too-rosy picture of Australian finances, despite indications from the IMF that the Australian dollar may be over-valued and that local banks could be dangerously concentrated. (AAP)

Mr Swan denied he was painting a too-rosy picture of Australian finances, despite indications from the IMF that the Australian dollar may be over-valued and that local banks could be dangerously concentrated. (AAP)

The IMF has given "a vote of confidence" to Australia's economic fundamentals, Wayne Swan has told the financial services industry.

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The International Monetary Fund has given the Australian economy a resounding vote of confidence and endorsed a return to surplus, Treasurer Wayne Swan says.

In an address to the financial services industry in Sydney on Friday, Mr Swan described the latest IMF assessment of the country as a thumbs up.

"(It is) a vote of confidence in our economic fundamentals in this country, solid growth, low unemployment, strong investment pipeline, lower interest rates and rate of inflation," he told reporters.

He also denied that the IMF was suggesting Australia should abandon its bid to return the budget to surplus in the event of a sharp global economic downturn.

"If you read the IMF report, they've endorsed a return to surplus and the reasons for it," he said.

"It sends a message to the world about the strength of our economy, it gives maximum flexibility to the Reserve Bank to adjust monetary policy."

He denied he was painting a too-rosy picture of Australian finances, despite indications from the IMF that the Australian dollar may be over-valued and that local banks could be dangerously concentrated.

"I know that there are people who will go out there like Tony Abbott and talk our economy down and behave in a Tea Party fashion, but the fact is that the fundamentals of the Australian economy are strong," he said.

"Yes, there are challenges in the global outlook (and) they do flow through to the Australian economy but we've got to build on these strong fundamentals."

Opposition leader Tony Abbott said Labor now looked like reneging on its commitment to deliver a surplus.

"What we need is a government that stops spending like a drunken sailor," he told reporters in Sydney on Friday.

"This is a government which on the one hand promises a $1.5 billion surplus this year, notwithstanding the fact that revenue is down, the terms of trade are down, and at the same time promising $120 billion worth of new spending.

"Labour looks like reneging on yet another solemn commitment, a commitment to deliver a surplus."

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