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'Temporary' Budget deficit to last six years

'Temporary' Budget deficit to last six years article image

Federal Treasurer Wayne Swan has pointed to worsening global conditions, which he says would force the Government to run the "temporary" Budget deficit until 2015. The deficit for 2009/10 is expected to be $50 billion, but could be up to $70 billion. "There's no doubt that the deficit will last longer, the temporary deficit will be longer as a consequence of revenue downgrades imposed on this country by the rest of the world," Swan said. "We are absolutely determined to return the Budget back to surplus over time once growth returns to trend [but] that depends on the length of the global recession." Opposition treasury spokesman Joe Hockey indicated the Government would have to ask for more funds and stretch its debt limit to $300 billion, beyond the amount already legislated. "The Rudd Government's response to this crisis appears to consist of throwing all fiscal restraint to the wind and spending taxpayers' money from generations yet to be born," said Hockey. Hockey said the Government's handling of the downturn would manifest as a "deep sense of betrayal" in voters: "Governments who promise their people that they can create and protect jobs and then fail to do so may find themselves with a growing credibility gap, even if citizens are currently giving them the benefit of the doubt."

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