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| Version 0 | Version 1 |
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| Commission of Audit unveils radical blueprint to shrink government | Commission of Audit unveils radical blueprint to shrink government |
| (about 1 hour later) | |
| Australians would pay more for | Australians would pay more for |
| health and education and receive lower payments for unemployment, pension, | health and education and receive lower payments for unemployment, pension, |
| family, childcare and parental leave over time under a radical blueprint to | family, childcare and parental leave over time under a radical blueprint to |
| shrink the role of government that foreshadows the Coalition's resolve to | shrink the role of government that foreshadows the Coalition's resolve to |
| deliver a deep "pain" for long-term economic gain in its first budget, | deliver a deep "pain" for long-term economic gain in its first budget, |
| due in two weeks. | due in two weeks. |
| The sweeping report from the | The sweeping report from the |
| Commission of Audit, which was charged with bringing national spending under | Commission of Audit, which was charged with bringing national spending under |
| control, proposes a plethora of tougher eligibility rules and lower annual | control, proposes a plethora of tougher eligibility rules and lower annual |
| increases in pensions and payments – including adding the value of the family | increases in pensions and payments – including adding the value of the family |
| home to the means test for the aged pension, forcing young single people to | home to the means test for the aged pension, forcing young single people to |
| move to find a job after one year on the dole and reducing payments to stay-at-home spouses. It also advocates co-payments for visits to the doctor and buying | move to find a job after one year on the dole and reducing payments to stay-at-home spouses. It also advocates co-payments for visits to the doctor and buying |
| medicine, a means test for receiving the full childcare rebate and another | medicine, a means test for receiving the full childcare rebate and another |
| drastic reduction in Tony Abbott's recently pared-back paid parental leave. | drastic reduction in Tony Abbott's recently pared-back paid parental leave. |
| On the national disability insurance | On the national disability insurance |
| scheme, the report proposes that it should be rolled out more slowly and that | scheme, the report proposes that it should be rolled out more slowly and that |
| the agreements already signed with the states should be changed to achieve | the agreements already signed with the states should be changed to achieve |
| this, with the head of the Commission of Audit, the Business Council of Australia | this, with the head of the Commission of Audit, the Business Council of Australia |
| president Tony Shepherd, saying there was "no point signing up for things | president Tony Shepherd, saying there was "no point signing up for things |
| we cannot afford". | we cannot afford". |
| The report also proposes handing | The report also proposes handing |
| over all policy and funding responsibility for government and non-government | over all policy and funding responsibility for government and non-government |
| schools to the states with lower federal funding over time than that would have | schools to the states with lower federal funding over time than that would have |
| flowed under the former government's Gonski plan, and increasing the proportion | flowed under the former government's Gonski plan, and increasing the proportion |
| of education costs paid for by territory students through the Higher Education | of education costs paid for by territory students through the Higher Education |
| Loans Program. It also proposes that patients should pay $15 co-payments for | Loans Program. It also proposes that patients should pay $15 co-payments for |
| visits to the doctor, with concession card holders paying $5, and an extra $5 | visits to the doctor, with concession card holders paying $5, and an extra $5 |
| co-payment for all medicines. | co-payment for all medicines. |
| And it advocates a total rethink of | And it advocates a total rethink of |
| how state and federal governments work – allowing states to raise their own | how state and federal governments work – allowing states to raise their own |
| revenue to deliver health and education and housing services more autonomously, | revenue to deliver health and education and housing services more autonomously, |
| with federal income tax being reduced by the amount each state proposes to | with federal income tax being reduced by the amount each state proposes to |
| raise. It also advocates a total rethink of the contentious method for | raise. It also advocates a total rethink of the contentious method for |
| distributing to the states revenue raised through the GST, coming down in | distributing to the states revenue raised through the GST, coming down in |
| favour of the big states' arguments that GST should be shared on a per capita | favour of the big states' arguments that GST should be shared on a per capita |
| basis, with extra grants to small states that would otherwise be left worse | basis, with extra grants to small states that would otherwise be left worse |
| off. Shepherd said states needed to be "sovereign in their own domain". | off. Shepherd said states needed to be "sovereign in their own domain". |
| He said the complex and | He said the complex and |
| overlapping responsibilities between federal and state governments was | overlapping responsibilities between federal and state governments was |
| "one of the great threats to the country" which "cannot be swept | "one of the great threats to the country" which "cannot be swept |
| aside". The government has commissioned a separate white paper on the | aside". The government has commissioned a separate white paper on the |
| issue. | issue. |
| The report deliberately phases in its | The report deliberately phases in its |
| proposals for sweeping cuts. It reduces government spending by just $1.6bn in | proposals for sweeping cuts. It reduces government spending by just $1.6bn in |
| 2014-15 and $3.4bn in 2015-16; but this jumps to $20.6bn in cuts in 2017-18 – | 2014-15 and $3.4bn in 2015-16; but this jumps to $20.6bn in cuts in 2017-18 – |
| after the next election – and leaving government spending a massive $67bn lower | after the next election – and leaving government spending a massive $67bn lower |
| than in would otherwise have been in 2023-24 when the budget would return to a | than in would otherwise have been in 2023-24 when the budget would return to a |
| sustainable surplus. | sustainable surplus. |
| The proposed cuts fall heavily on | The proposed cuts fall heavily on |
| the biggest recipients of government payments – unemployed, sick and | the biggest recipients of government payments – unemployed, sick and |
| disabled people and low and middle income families – but the report says the separate | disabled people and low and middle income families – but the report says the separate |
| taxation review should also consider generous superannuation taxation | taxation review should also consider generous superannuation taxation |
| concessions that cost the government $30bn a year and flow almost entirely to | concessions that cost the government $30bn a year and flow almost entirely to |
| the wealthy. | the wealthy. |
| Shepherd denied the report was advocating a "program of austerity", saying, "We tried to make sure we looked after the deeply disadvantaged ... people who can look after themsleves [should] look after themselves." | Shepherd denied the report was advocating a "program of austerity", saying, "We tried to make sure we looked after the deeply disadvantaged ... people who can look after themsleves [should] look after themselves." |
| The Abbott government, aware of the | The Abbott government, aware of the |
| political damage of hitting only the poor, is planning an immediate | political damage of hitting only the poor, is planning an immediate |
| "temporary" personal tax rise for people earning more than $80,0000, | "temporary" personal tax rise for people earning more than $80,0000, |
| but releasing his report Shepherd made a clear case against such rapid, short-term changes. | but releasing his report Shepherd made a clear case against such rapid, short-term changes. |
| He said the commission had deliberately | He said the commission had deliberately |
| "avoided any sudden shocks to people" because implementing changes | "avoided any sudden shocks to people" because implementing changes |
| and cuts over time "makes it much easier to bring the community with | and cuts over time "makes it much easier to bring the community with |
| us" and ran a lower risk of damaging the "still fragile" | us" and ran a lower risk of damaging the "still fragile" |
| economy. | economy. |
| The finance minister, Mathias | |
| Cormann, said it was important for the government to start reducing the deficit | |
| straight away and it would be careful not to do anything that damaged economic | |
| growth. | |
| The treasurer, Joe | |
| Hockey, said that it was “kind of ridiculous” for the government to be required | |
| to keep every election promise when it had inherited a budget which Labor had | |
| falsely promised would return to surplus. | |
| All this talk about | |
| broken promises, of course we will endeavour to keep our promises … but please, | |
| this idea that everything we said is going to be held against us ... given what | |
| has moved on us is kind of ridiculous.” | |
| The treasurer, Joe Hockey, has had | The treasurer, Joe Hockey, has had |
| the report for several weeks and is already in the final stages of his budget | the report for several weeks and is already in the final stages of his budget |
| planning, but the commission's headline finding – that without drastic action | planning, but the commission's headline finding – that without drastic action |
| net debt would rise to $440bn by 2023-24 and the budget would never return to | net debt would rise to $440bn by 2023-24 and the budget would never return to |
| surplus – has galvanised the government to take politically unpopular | surplus – has galvanised the government to take politically unpopular |
| decisions. | decisions. |
| He refused to rule out | |
| any measures proposed in the Commission of Audit report, other than the | |
| suggestion the government reconsider its pledge to increase defence spending to | |
| 2% of GDP. | |
| Tony Abbott this week conceded | Tony Abbott this week conceded |
| payments under his "signature" paid parental leave scheme would have | payments under his "signature" paid parental leave scheme would have |
| to be reduced from $75,000 to $50,000, but the audit commission says they | to be reduced from $75,000 to $50,000, but the audit commission says they |
| should be cut further to just over $28,000. It says the 1.5% company tax levy – | should be cut further to just over $28,000. It says the 1.5% company tax levy – |
| imposed to pay for the scheme – should stay, but the extra money should go to | imposed to pay for the scheme – should stay, but the extra money should go to |
| extend childcare to nannies, with a new means test which would still allow early families to get 50% of the current non-means tested childcare benefit. | extend childcare to nannies, with a new means test which would still allow early families to get 50% of the current non-means tested childcare benefit. |
| The report proposes huge cuts to the | The report proposes huge cuts to the |
| federal public service including the abolition of seven bodies and the merging of 35 others and tells the government to make further cuts to corporate welfare | federal public service including the abolition of seven bodies and the merging of 35 others and tells the government to make further cuts to corporate welfare |
| and research and development grants and to reconsider its target to increase | and research and development grants and to reconsider its target to increase |
| defence spending to 2% of GDP. | defence spending to 2% of GDP. |
| Many of the recommendations align | Many of the recommendations align |
| with what is already known about the budget – that it is likely to propose | with what is already known about the budget – that it is likely to propose |
| Medicare co-payments and major public service cuts. Other recommendations are likely | Medicare co-payments and major public service cuts. Other recommendations are likely |
| to be ruled out by the government, with some deferred for possible | to be ruled out by the government, with some deferred for possible |
| implementation at a later time. | implementation at a later time. |
| The opposition leader, Bill Shorten, said the report was written "by big business, for big business". | |
| This is Tony Abbott's plan to put up your taxes and to cut your | |
| services. It is a plan for cuts, not a plan for growth. | |
| If he gets his way, Tony Abbott will turn the most basic things in | |
| life – education, healthcare, support for older Australians – into a | |
| massive everyday struggle for working families. | |
| This is a report | |
| written exclusively by special powerful interests and it shows. This is a | |
| report written by big business for big business that will hurt | |
| hard-working families. It shows how out of touch this prime minister is, | |
| how twisted Tony Abbott's priorities are for Australia." |