Australia aims to nearly halve budget deficit

The Australian government plans to nearly halve its fiscal deficit as part of a tough budget that includes cuts to welfare and tax hikes.

Budget documents released on Tuesday show defence spending has been quarantined from the cuts and money is allocated for the ongoing search for the missing Malaysian airliner.

The financial blueprint for the fiscal year starting July 1 is forecast to reduce the deficit from 49.9 billion Australian dollars this year to AU$29.8 billion in 2014-15.

The government said it will increase spending on roads, railways and a new Sydney airport in a bid to fill an economic void left by a cooling resource industry.

Growth in the foreign aid budget will be slowed to save 7.9 billion Australian dollars ($7.4 billion) over five years.