However, Liberal senator Zed Seselja, who is travelling overseas, said the report shone a light onto the depth of the fiscal problems the Labor Party got the Australian people into.

"Every Australian man, woman and child is now carrying $25,000 in debt from the Labor government, this cannot continue," he said.

"People should not assume that we will accept the audit recommendations; some may be accepted in part or full, others be given further study and some recommendations may not be feasible.

"Canberra is already dealing with Labor’s 14,500 hidden public service job cuts.

"I will continue lobbying my Coalition colleagues hard to ensure that Canberrans do not unfairly shoulder the burden of fixing up Labor’s mess."

Senator Kate Lundy described the commission of audit report as flippant, shallow and ideological.

"It is a disastrous report for Canberra and, indeed, for all of Australia," she said.

"We know so many Canberrans will be directly affected, whether they are university students required to pay back HECS sooner and at a higher rate, right through to pensioners who will now be absolutely beside themselves wondering what is going to happen with the treatment of the family home as an asset.

“I think this creates the kind of uncertainty that will keep businesses in Canberra wondering about our future.

"There is a list about the future of a whole range of agencies and departments which not only proposes to abolish an enormous number but seeks to transfer a lot of responsibility back to the states."

Senator Lundy is incensed the National Capital Authority is included in the agencies proposed for review.

"For goodness sake, I don’t think there is one Canberran who doesn't subscribe to the principle that the Commonwealth has an interest in the national capital," she said.

"Yet here we have this flippant, shallow, ideological report having a one line recommendation that that responsibility be handed back to the ACT government."

Senator Lundy said the ACT government has stepped up to the challenge of keeping the territory's economy healthy, with the experience of responding to the Howard government's commission of audit report.

"I say to the Canberra community and to the business community, we can get through this, it will be hard," she said.

"We’ve got the political fight of our lives on to preserve the values and principles that I think represent what modern Australia is.

"This is the first report that goes to the heart of challenging the principles that I think have been universal principles or values before, and this is why this report is so outrageous.

"It really walks away from all that and offers up a blueprint for Australia that will turn its back on the principles of a fair go and on the principle of universality of access to education and healthcare.

"If this blueprint was followed, we will become a user-pay society which benefits only those with financial means and privilege.

"That's not the Australia I believe in and not the Australia that I think the absolute majority of Australians want to live in in the future."

Labor Member for Fraser Andrew Leigh said the report was "of big business, by big business and for big business".

"It doesn’t mention that Tony Abbott doubled the deficit since coming to office and it gives the Coalition excuses to break their promises," he said.

"The Australian Public Service serves Australians well – we have about as many public servants per person as we had when the Howard government left office.

"Internationally, Australia’s public service is of a similar size to other developed nations. Only an ideologue would slash it."

Dr Leigh said slowing the implementation of the National Disability Insurance Scheme and subjecting the states to renegotiate with the Commonwealth would be "cruel indeed".

"This is an essential reform for all Australians, which Tony Abbott before the election said he supported," he said.

"None of us know when we, or our loved ones, might find ourselves with a profound disability."

Member for Canberra Gai Brodtmann is concerned about the future of the federal Health Department, saying it was one of Canberra's major employers.

"They are looking at cutting at least 15,000 APS jobs," she said.

"Today Canberrans have been given a taste of their fate and they are bracing for a bitter future.

"The commission of audit has recommended deep and sweeping changes to the public service, changes that will ultimately result in a significantly smaller public service and therefore a significantly less prosperous Canberra.

"These recommendations will not only impact on public service jobs but also on small businesses, tradies and the capital region."

Ms Brodtmann said she was concerned the report was essentially asking some of Australia's most vulnerable people to bear the brunt of the pain.

She said she was concerned about reported comments by the commission of audit chairman Tony Shepherd that public servants should consider the recommendations in terms of their country's future, not their job.

"These comments are deeply concerning because of the fact that public servants are servants of democracy," she said.

"They take up their jobs to make a difference to Australia, they are here to serve the people of Australia, they think of the country every day they go to work."