Foreign aid cut as Joe Hockey faces budget blow-out
TREASURER Joe Hockey will slash foreign aid and reveal a massive blowout in this year's deficit when he hands down his mid-year budget update today.
The ABC's AM program understands the aid budget will be reduced to Howard-era levels and more than $3 billion will be cut over the next four years.
The cuts in today's Mid-Year Economic and Fiscal Outlook (MYEFO) come on top of a $7.6 billion cut to the aid budget in May.
Some of the money will be redirected to fund new spending decisions, such as a $630 million boost to national security and the deployment of troops to the Middle East.
This year's budget deficit, which was forecast to be $29.8 billion in May, is now set to exceed $40 billion as "global headwinds" continue to batter the Australian economy.