Australia’s government delivered a promised surplus budget, scrapping planned tax breaks but offering more cash to its traditional supporters to deflect attention from scandals that threaten prime minister Julia Gillard’s grip on power.

The government hopes the modest surplus, which some economists considered inappropriate while the central bank is cutting interest rates, will bolster its economic policy credentials and keep Australia’s AAA credit rating safe.

Treasurer Wayne Swan said the budget would deliver a A$1.5 billion (€1.17 billion) surplus in the year to June 30th, 2013, largely from cuts in spending on defence and foreign aid and abandoning planned tax cuts for companies and savers. Small surpluses were also forecast for the following three years. “The deficit years of the global recession are behind us. The surplus years are here,” Mr Swan said in a budget speech to parliament.

Despite economists’ doubts, Mr Swan said the fiscal tightening would protect Australia against global turbulence and give the central bank room for more rate cuts.