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| Commission of Audit unveils radical blueprint to shrink government | Commission of Audit unveils radical blueprint to shrink government |
| (35 minutes later) | |
| Australians would pay more for health and education and receive lower benefits for unemployment, pensions, family, childcare and parental | |
| leave over time under a radical blueprint to shrink the role of | |
| government and force all but the "deeply disadvantaged" to look after | |
| themselves. | |
| The sweeping report from the Commission of Audit, which was charged | |
| with bringing national spending under control, proposes a plethora of | |
| tougher eligibility rules and lower annual increases in pensions and | |
| payments and has been considered by the Coalition as it prepares to | |
| deliver deep "pain" for long-term economic gain in its first budget, due | |
| in two weeks. | |
| The highly contentious recommendations include adding | |
| the value of the family 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 | |
| $15 co-payments for visits to the doctor and additional co-payments for | |
| buying medicine, a means test for receiving the full childcare rebate | |
| and another drastic reduction in Tony Abbott's recently pared-back paid | |
| parental leave. | |
| And in a recommendation that would spell the end of Australia's system of universal healthcare, it says high-income earners should be forced to insure themselves for basic health services rather than rely on Medicare. | |
| 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 tertiary 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 | The finance minister, Mathias |
| Cormann, said it was important for the government to start reducing the deficit | 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 | straight away and it would be careful not to do anything that damaged economic |
| growth. | growth. |
| The treasurer, Joe | The treasurer, Joe |
| Hockey, said that it was “kind of ridiculous” for the government to be required | 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 | to keep every election promise when it had inherited a budget which Labor had |
| falsely promised would return to surplus. | falsely promised would return to surplus. |
| All this talk about | All this talk about |
| broken promises, of course we will endeavour to keep our promises … but please, | 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 | this idea that everything we said is going to be held against us ... given what |
| has moved on us is kind of ridiculous.” | 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 | He refused to rule out |
| any measures proposed in the Commission of Audit report, other than the | any measures proposed in the Commission of Audit report, other than the |
| suggestion the government reconsider its pledge to increase defence spending to | suggestion the government reconsider its pledge to increase defence spending to |
| 2% of GDP. Government sources also ruled out including the family home in the means test for the aged pension. | |
| 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". | 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 | 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. | 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 | If he gets his way, Tony Abbott will turn the most basic things in |
| life – education, healthcare, support for older Australians – into a | life – education, healthcare, support for older Australians – into a |
| massive everyday struggle for working families. | massive everyday struggle for working families. |
| This is a report | This is a report |
| written exclusively by special powerful interests and it shows. This is a | written exclusively by special powerful interests and it shows. This is a |
| report written by big business for big business that will hurt | report written by big business for big business that will hurt |
| hard-working families. It shows how out of touch this prime minister is, | hard-working families. It shows how out of touch this prime minister is, |
| how twisted Tony Abbott's priorities are for Australia." | how twisted Tony Abbott's priorities are for Australia." |
| The Greens said the commission had been "rigged" to produce exactly the "dog-eat-dog outcome" that it had delivered. | |
| The party's leader, Senator Christine Milne, said the report should be "a call to arms that we begin the process of kicking this mob out". |