In the declining iron ore price from $120 a tonne to
$47 a tonne and perhaps will be $35 a tonne soon enough, the Treasurer of
Australia, Joe Hockey, has said that the Treasurer budget for May would be
based on the anticipated price of iron ore falling further.
Iron ore is Australia’s biggest export and the
reducing revenue is predicted about a$25bn over the next four years. This high
decreasing has been partly blamed on China’s falling demand. The estimated $35
a tonne is lower than the conservative forecast from December’s budget update.
The conservative forecast predicted that the iron ore price would be $60 a
tonne.
Each fall of $10 has been said to cost Australian
Economy a$2.5bn in revenue and there is no guarantee that the deficit may not
worsen again. Despite on that, the treasurer said that the budget would contain
a credible path back to surplus. Even though he refused to answer about when
the surplus could be achieved. Iron ore had a big impact on the budget he said,
therefore there may be a cut for health and welfare budgets.
That predication provoked criticism from the shadow
treasurer Chris Bowen because of that unrealistic budget. However, even in this
bad predication of revenue, the Prime Minister Tony Abbott has promised that
the May 12 budget would be good news for families and small business.