CANBERRA, May 1 (Reuters) - Australia's coming budget will forecast unemployment to peak at more than 8 percent, leaving a million people out of work, as the economy registers its first annual contraction since the early 1990s, a daily said on Friday.
The Australian, quoting leaked information from a closed-door meeting of national and state governments on Thursday, said the May 12 budget would also estimate a 0.5 percent economic contraction for the year to June 2010.
Treasurer Wayne Swan, said to have revealed the forecasts at Thursday's meeting, declined to comment on the report.
Swan had told the meeting that Australia's economy was set to perform below its long-term trend into 2010-11, pushing unemployment to the "mid-to-high eights", the Australian said, quoting officials who had attended the meeting.
This suggested the number of unemployed would rise by more than 50 percent from its current level of 650,000. The unemployment rate now stands at 5.7 percent.
The centre-left government's forecasts would be the most pessimistic of any budget, showing zero growth on average over 2008-09, a contraction in 2009-10 and a return to growth in 2010-11 though below long-term trend growth of about 3 percent.
The Australian Financial Review, also quoting information leaked from Thursday's meeting, said the budget deficit for 2009-10 could be as high as A$70 billion, with revenue down by A$200 billion over four years.
Swan also declined to comment on this report but said revenue assumptions made in the last budget had already been cut by about A$115 billion.
"There are very substantial revenue writedowns which are producing a temporary deficit," he said.
The International Monetary Fund has forecast a 1.4 percent contraction in the Australian economy in calendar 2009 and growth of 0.6 percent in 2010.
Treasury expectations for unemployment are worse than the IMF forecast for joblessness to peak at 7.8 percent.
(Reporting by Rob Taylor; Editing by Mark Bendeich)