The Australian government has lowered its economic growth forecast for financial year 2012/13 to three percent from a previous forecast of 3.25 percent, according to the update to the May 2012/13 budget released by Deputy Prime Minister and Treasurer Wayne Swan on Monday.

Australia's terms of trade is also forecast to worsen, declining by eight percent this financial year against a previous forecast fall of 5.75 percent. But unemployment rate is expected to remain low at 5.5 percent in 2012/13 and 2013/14, while inflation is likely to remain well contained.[Hong Kong Company Formation|Hong Kong Company Registration]

The government has cut its forecast surplus for this financial year to 1.1 billion Australian dollars (1.13 billion U.S. dollars) from 1.5 billion Australian dollars due to lower commodity prices and falling tax revenue.

"Still, with a low unemployment rate, solid GDP growth, a strong financial sector, room to manoeuvre on monetary policy and strong public finances, Australia is well-placed to manage the effects of any further deterioration in the global economy," the update said.

Swan said while Australia's economic fundamentals remain strong, worsening global conditions have cut almost 22 billion Australian dollars (22.6 billion U.S. dollars) in tax revenue over the forward estimates and 4 billion Australian dollars alone in 2012/ 13.

"The government has responded to the more challenging global outlook by delivering 16.4 billion Australian dollars in new savings over the forward estimates," Swan said. "These savings strike the right balance, minimizing any impact on the economy and on the community's most vulnerable, while still maintaining strong public finances."

As part of its austerity measures, private health insurance rebate will be limited to inflation, visa application fees will be increased, the baby bonus payment for the second and subsequent children will be reduced to 3,000 Australian dollars from 5,000 dollars, funds for Labor's trades training centres program will be delayed, and the Medicare teen dental program will be shut down.[Hong Kong Company Registration Guide]

One of the biggest revenue measures announced in the budget update is a change in how regularly companies pay tax. From the start of 2014, companies with an annual turnover of more than 1 billion Australian dollars will begin paying tax in monthly instalments rather than quarterly.

The change will gradually be rolled out to other businesses, in a move the government expects will boost the budget bottom line by 8.3 billion Australian dollars over four years.