Australia has been dragged into recession, Prime Minister Kevin Rudd says.
"This global economic recession has also dragged Australia into recession and has also produced the single biggest collapse in tax revenues in post-war Australia,'' Mr Rudd said in Perth on Wednesday.
"We are in an exceptionally deep and widespread global recession, 28 of the 30 most developed economies in the world are already in recession or have experienced one quarter of negative economic growth,'' he told a business lunch.
"Seven of Australia's ten largest trading partners are already in recession.''
Mr Rudd said a temporary budget deficit was inevitable given the current economic crisis.
"Global conditions have never played a bigger role in the framing of the budget that we now currently confront,'' Mr Rudd said.
"In the current unprecedented global conditions a temporary deficit is not an option it is an inevitably.
"Framing a budget in the current in the current context is incredibly tough, framing the budget in these circumstances has never been framed at a more difficult time.
"That is why temporary deficits are necessary and temporary government borrowings are necessary as well, necessary to support businesses and support jobs until the private sector recovers.'' Mr Rudd said.
AAP
