Feb. 2 (Bloomberg) -- Australia’s tax revenue will be A$115 billion ($72.2 billion) less than anticipated over the next four years, driving the nation’s budget into its first deficit since 2001, Prime Minister Kevin Rudd said.

“This is a collapse in government revenues,” Rudd, 51, said in Canberra today, without giving a forecast for the deficit. The revenue drop will be “spread across the forward estimates,” he said, referring to this and the next three fiscal years.

The government in November slashed its budget forecast by A$40 billion or 75 percent, saying slower economic growth and the financial crisis would cut tax revenue. Rudd today said receipts had fallen a further A$75 billion, driving the budget into deficit.

The “deterioration suggests an average annual deficit of A$14.2 billion,” or 1.1 percent of gross domestic product, said Andrew Hanlan, a senior economist at Westpac Banking Corp. in Sydney. “This assumes that expenditures are unchanged and that there are no net new spending costs -- both of which we know are untrue.”

Since September, the government has announced A$44.72 billion in stimulus spending and the central bank has embarked on its biggest round of interest-rate cuts in almost two decades.

‘Difficult Year’

“This will be a difficult year,” Rudd said. “This government will leave no stone unturned to support growth, jobs and stabilize the financial system.”

Reports today add to signs the economy may follow the U.S., Europe and Japan into a recession. Australian manufacturing contracted for an eight month in January, house prices fell for a third quarter in the three months through December and planned investment dropped for the first time in four years.

Six of Australia’s top 10 trading partners are now in recession, Rudd said. The nation was also suffering from a slowing in the Chinese economy -- its biggest trading partner. Trade makes up one-fifth of the economy.

The central bank has cut three percentage points from its cash rate since September. Policy makers are forecast to reduce the benchmark interest rate by 1 percentage point tomorrow to 3.25 percent, the lowest level since 1964.

“We’re going to move heaven and earth to keep growth positive,” Rudd said.

The government will outline new budget forecasts in the current parliamentary session, which ends on March 19. Treasurer Wayne Swan is due to deliver the 2009-2010 budget and forecasts for the following three years on May 12.

To contact the reporter on this story: Gemma Daley in Canberra at gdaley@bloomberg.net

Last Updated: February 2, 2009 00:41 EST