Shadow treasurer Joe Hockey says he is "absolutely" committed to delivering a first-term budget surplus, but has stopped short of promising to do so amid a political brawl over Labor's decision to dump its pledge to balance the budget this year.
Treasurer Wayne Swan yesterday conceded that the Government was "unlikely" to return the budget to surplus in 2012-13, despite repeated assurances to the contrary.
This morning, he moved to defend Labor's economic credentials in the face of a Coalition attack that the broken surplus promise represents a failure of competency and a failure of trust.
"We've had the most turbulent and uncertain global conditions in 80 years, and this Government has taken the correct economic decisions to counter those conditions," Mr Swan told Channel Nine.
He later told ABC AM: "The revenue figures changed, and the only responsible thing to do in those circumstances is to evaluate where it leaves us for the future."
Mr Hockey has consistently declared that Mr Swan would never deliver a budget surplus, and is today claiming vindication for his stance.
"They've been fudging the numbers and we said they're never going to deliver a real surplus and we've been proven right," Mr Hockey told ABC News Breakfast.
"Under this circumstance, Labor cannot keep fiddling the numbers. Everyone knows that, I've been saying it for three years that Labor will try to fiddle the numbers to get to surplus.
"I've been proven absolutely, dead-set right."
Asked if the Coalition would go to the next election promising to deliver a surplus, Mr Hockey said: "We can only look at what the books are, and the books haven't closed."
"I'm not going to make enormous promises based on misinformation - I won't do that, I won't be irresponsible the way the Labor party is."
But he insisted the Coalition was committed to surpluses, because it was important to pay down debt.
The Government's announcement yesterday marked a dramatic about-face in Labor's rhetoric on a budget surplus, which has previously declared that it would be delivered "come hell or high water".
Mr Swan has consistently said that returning the budget to surplus would give the Reserve Bank room to cut interest rates. Yesterday, he said pursuing the promise would hurt the economy and cost jobs.
Independent MP Rob Oakeshott says he does not care what the political implications are for Labor, arguing the focus should be on protecting the economy from what he fears could be a further downturn.
"I'm personally really worried about the first quarter of 2013," Mr Oakeshott told ABC News.
"All the feedback I'm getting from my manufacturing sector on the mid-north coast (of New South Wales) is that forward contracts are very slow - more so than in that 2008-2009 period where we stimulated the economy.
"So unless we have a really bumper summer... I think the big conversation potentially for the first quarter of next year will be a stimulus 'round 3' type of conversation."
He said it was "dumb politics" in the first place for Labor to guarantee a surplus in the face of global economic uncertainty.
Most economists welcomed the Government's announcement yesterday, saying further budget cuts would have been a "disaster" for the economy.
Mr Swan has so far refused to indicate the magnitude of this year's budget outcome, with some economists predicting the deficit could be about $10 billion.
He says the Government will reassess the figures in the new year, and make a judgement then.
But he says the deteriorating budget position will not affect other Government commitments, such as establishing a National Disability Insurance Scheme or paying for an overhaul of school funding.
"We will make room in our budget, we will change priorities, so those expenditure priorities are put to the fore. And we'll do that within the context of strict expenditure control," he said.
Mr Swan yesterday said the Government's problem was not that it was spending too much, but that revenues fell well short of what it was expecting.
Mr Hockey disagrees: "Revenue this year is 6 per cent higher than last year, and last year was 12 per cent higher tax revenue than the year before."
"So, the Labor party is getting the revenue in. The problem is they're wasting money. They've committed $15 billion of expenditure against a mining tax that hardly raises a dollar - that is completely irresponsible."