The global financial crisis has smashed a A$40bn ($27.7bn, £17bn, €21.4bn) hole in the Australian government’s finances the country’s treasurer said on Wednesday, warning of weaker economic growth and rising unemployment.

”There’s no point in trying to sugar-coat these figures,” Wayne Swan said as the government downgraded its estimated budget surplus for the year ending next June from A$21.7bn to A$5.4bn and lowered its economic growth estimate from 2.75 per cent to 2 per cent. The budget surplus estimate for the following year was cut from A$19.7bn to A$3.6bn.