THE NEWS WRAP: Business leader warns Swan’s fixation on budget surplus is “foolish”

The Federal Government’s mid-year budget update is set to contain around $3 billion in spending cuts as Labor strives to achieve its forecast $1.5 billion budget surplus next year.

Changes in defence and superannuation are expected, as well as business tax credits. Treasurer Wayne Swan said that the savings would be “significant.”

However, Tony Shepherd, president of the Business Council of Australia, said that a budget surplus at any cost would be “foolish.”

WA still king of the states: Report

Western Australia remains the nation’s economic powerhouse, despite an apparent slowdown in mining activity, according to a new report.

The CommSec State of the States report found that the resources industry was keeping WA ahead of the pack, with the Northern Territory also benefitting despite its small population.

The ACT is third, ahead of Victoria, Queensland and NSW. South Australia is next, with Tasmania bottom of the rankings.

Kickstarter project grinds to halt

Work on a crowdfunded video game in the US has ceased after the project ran out of money and its staff quit.

More than 1,200 people pledged money on crowdfunding site Kickstarter to develop Haunts: The Manse Macabre, netting it more than its $25,000 target.

However, in a warning for other start-ups keen to utilise crowdfunding, the project ran out of money and has been mothballed.

Markets

The Dow Jones Industrial Average was down 1.39% to 13361.02 on Friday. The Australian dollar slipped to US103.15 cents.