The federal government now expects the Budget to remain in deficit for at least a decade, while the nation’s net debt is slated to reach almost $1 trillion in coming years.
However, Chris Richardson of Deloitte Access Economics says the government will have to begin the process of Budget repair much sooner. He contends that the stage-three income tax cuts, which favour people earning over $180,000 and will cost $17 billion a year from financial year 2025, will need to be shelved. Richardson argues that the government will not be able to justify reducing taxes for high-income earners while racking up big deficits.
Outlook Economics director and former Treasury official, Peter Downes, also questions whether the stage-three tax cuts are affordable.
