Australian treasurer rules out raising taxes in May budget despite iron price hurting revenue

Australia's treasurer says the low iron ore price is shaving billions of dollars off government revenue forecasts, but he will not increase taxes to make up the shortfall.

Treasurer Joe Hockey estimates that every $10 fall in the price of a metric ton of iron ore — Australia's most lucrative exports — cuts $2.5 billion in tax revenue a year for the government.

The price has fallen from about $100 when Prime Minister Tony Abbott's conservative government was elected in September 2013 to less than $48 last week due to weakening Chinese industrial demand and increased production.

Hockey signaled on Monday that his plan to return the national budget to surplus will be delayed when he announces his economic blueprint on May 12 for the next fiscal year.