Iraq, drought will weigh on Aussie budget

CANBERRA, Australia (AP) - Australia's finance minister, Treasurer Peter Costello, warned Monday that a crippling drought and Australia's commitment to a possible war in Iraq would weigh heavily on the budget. 

"The biggest new expenditure that we'll be having in the next year is obviously the forward deployment of troops, the aircraft, the ships in the Gulf,'' Costello told reporters ahead of a Cabinet meeting. 

"That of course will be a very significant deployment with considerable costs.'' 

The government has not said how much it is costing to send 2,000 military personnel to the Persian Gulf to prepare for possible strikes on Iraq. 

Costello said the Cabinet meeting in Canberra would discuss the budget strategy and the wider economic situation. Costello will deliver his budget in May for the fiscal year starting July 1. 

"It will be a very difficult year. We've come through a significant drought, our worst in 100 years, the international economy is weak, the United States economy has been through recession,'' he said. 

"And we now have a commitment for the forward deployment of our troops and aircraft and ships which will be expensive, very expensive.'' 

A yearlong drought that has slashed production in the nation's agriculture industry is showing signs of breaking with heavy rainfall across many drought-stricken regions in recent days - some of it so heavy it caused flooding in previously parched pastures. 

However, farmers have said they need plenty more rain before they can officially declare the drought over. 

"We all hope, don't we, that the drought will break fully,'' Costello said. - AP 

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