With the Mid Year Economic and Fiscal Outlook statement revealing a drop in the revenue for the next four financial years amounting to a whopping $20 billion, Wayne Swan, Federal Treasurer, has been prompted to put a halt to spending in order to save the 2012-2013 budget surplus promised to the Labor.

"We are experiencing the worst bout of global instability since the global financial crisis,” said Mr. Swan.

Though the economy of Australia is seen by the Treasury to grow by 3.25 percent in the financial year 2011-12, Mr. Swan is still trying to illustrate the global economy and its impacts on Australian economy using the MYEFO report.

"Global economic and financial conditions have deteriorated markedly in recent months, and the risks to global stability from the European sovereign debt crisis have intensified. Global growth prospects have been downgraded markedly in 2012, with the euro area expected to return to recession. This has led to a weaker near-term economic and fiscal outlook for Australia since the budget and substantial reductions to government revenues,” said Swan.

Here are the MYEFO’s ten key points:

1. The Australian economy is expected growth in 2011-2012 by 3.25 percent. This same rate will be followed until the next financial year. But for 2013-2014 and 2014-2015, this growth will drop to 3 percent.

2. In 2011-2012, there has been a deficit of $37.1 billion. But in 2012-2013, this is expected to return to surplus of only about $1.5 billion.

3. Employment will not be doing much good as it is expected to grow in 2012-2013 by just 1 percent. For the succeeding years, this will be grown by $1.5 percent each year.

4. There is a big hole to fill in the tax revenue as this will have fallen over the next four years by $20 billion.

5. There is a deferral of automatic tax deductions.

6. People working away from home are receiving living-away-from-home allowance which is costing the government a dear amount of money. If changes in this area will be enacted, a good $700 million will be saved by the government in the next four years.

7. The government reducing co-contributions on superannuation will help the government save about $1 billion over the next four years.

8. Middle-class welfare has been applied by the government. Baby bonus will be frozen at $5,000.

9. A good $436 million will be raised over the next four years by adapting better data matching.

10. A 2.5 percent cut in spending by public service is called upon.

With these key points, small businesses may also have to be on their feet and be ready for changes. It would be best if they utilize a reputable accounting software for business.

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