Wayne Swan will flood regional areas with 16,000 skilled migrants next year to maximise the payoff from the resources boom in a budget that has been smashed by a $16 billion collapse in revenue.

The Treasurer will tomorrow reveal a dramatic fall in capital gains tax receipts will help drive a $20bn budget deficit next financial year on the heels of a $51 billion budget shortfall for 2010-11.

But, with the budget to focus on tackling regional Australia's labour shortages with extra skilled migration and spending on skills training, he expects the nation's books to roar back into the black as promised in 2012-13.

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