The Australian stock market has pared morning gains to close slightly higher after the federal budget deficit increased and the Reserve Bank of Australia again warned the exchange rate was too high.
At the 1615 AEDT official market close, the benchmark S&P/ASX200 index was 0.27% higher at 5,103.2 points, while the broader All Ordinaries index rose 0.26%, at 5,106.1 points.
Australia's federal deficit is forecast to be $47 billion in fiscal 2014 and the budget is not expected to return to surplus before fiscal 2017, Treasurer Joe Hockey announced in the Mid-Year Economic and Fiscal Outlook today.
IG analyst Chris Weston noted that the deficit over the four-year forward estimates is expected to total $122.7 billion.
"[This] is in line with prior warnings that were well telegraphed in the local press," Mr Weston said.
"Ultimately its politics which loses from this, with both political parties shouldering the blame for Australia’s deteriorating economic fundamentals."
Meanwhile, the RBA repeated concerns about the "uncomfortably high" Australian dollar, even though the currency had "depreciated noticeably".