Taxpayers are facing seven years of Government debt, with the budget deficit spilling out over close to 70 billion dollars, double what was forecast by the Government in February.
Federal Treasurer Wayne Swan is warning the impact of the recession will mean the budget will remain in the red for longer than initially expected, expected to return to surplus around 2015-16.
Mr Swan told reporters deficits were necessary to confront the recession without slashing government services or lifting taxes. However, Opposition leader Malcolm Turnbull said the Government is treating voters as fools by expecting them to believe that “accepting the need for a deficit meant the size of the debt was no object.”
In order to cushion the effect of the blowout, Prime Minister Kevin Rudd said Australia’s debt will be the lowest of any major economy, and that it was the “responsible” thing to do, “embracing such a deficit strategy to deal with the challenges presented to us and other economies with the global recession.”
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