By Staff Writer

Prime Minister Kevin Rudd said a ‘temporary’ budget deficit is inevitable with $115 billion being slashed from Government tax revenues over the next four years due to the global economic crisis.

“The IMF (International Monetary Fund) has predicted the worst performance of the global economy since World War II,” he said.

“We have also seen with China, Australia’s biggest trading partner, an effective halving of their growth rates. That is in itself resulting in a $15 billion loss to the Australian economy over the 09/10 period.

“Japan, Australia’s second largest trading partner is already in recession. Six of Australia’s top trading partners are now in recession and that list grows.”

Mr Rudd said the global recession and the collapse in China’s growth in particular has produced a $115 billion fall in tax receipts to the government.

“That means an impact directly on our budget, that means of course a temporary budget deficit.”