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Two political decisions that will reverberate
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NSW Treasurer Dominic Perrottet says the Generations Fund is not punting on equity markets
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Entrenched budget deficits and debt exceeding $1 trillion will force tax rises, big spending cuts or cancelling income tax cuts for higher earners a few years from now, economists said.
The budget projects annual deficits for another decade, equal to about 1.5 per cent of GDP by 2031-32, or about $30 billion in todayâs dollars.
The government unleashed $95 billion of extra spending over five years in the budget, about two-thirds of which is permanent outlays for social programs such as aged care, the National Disability Insurance Scheme, mental health and childcare.
About one-third of the extra spending was temporary, for income tax refunds for low and middle earners and business tax breaks.
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