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Hockey: 'She'll be right attitude' is over

Treasurer Joe Hockey says structural reform must happen for Australia to maintain its quality of life. Nine News.

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Ordinary Australians would pay a $15 upfront fee to visit a doctor and medium- to high-income earners would be forced off Medicare altogether under sweeping changes advocated by Tony Abbott's hand-picked National Commission of Audit report that was released on Thursday.

The radical measures are just some of the changes proposed in a hardline economic blueprint aimed at rescuing a budget that both the government and the commission argue is otherwise locked on a path to permanent deficits.

Illustration: Ron Tandberg.

Illustration: Ron Tandberg.

New mutual obligation rules would force some unemployed to move to areas of greater employment prospects or lose the dole, and new means tests would see the family home factored in to the age pension eligibility for the first time, requiring prospective retirees to sell or face a lower standard of living.

Welfare payments would be tightened across the board with eligibility and indexation rates adjusted to reduce costs and, in the case of the Family Tax Benefit part B, scrapped altogether.

Other recommendations include:

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- Abolishing annual minimum wage cases – though not the minimum wage itself – and setting a new benchmark of 44 per cent of average weekly earnings

- Requiring unemployed people between 22 and 30 to move to areas of higher employment after one year or surrender the dole

- Increasing the Medicare levy surchage to 3 per cent to 3.5 per cent for high-income earners without private health cover.

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Carers, people on the disability support pension and other forms of assistance would also face changes that would see the rate of increase slowed.

The report that the Treasurer Joe Hockey insists is "not the budget" was nonetheless released following a budget-style lock-up for journalists in Canberra, adding to confusion about what measures will find official favour in the budget and what will not.

In a cryptic performance intended to give nothing away, he said the report demonstrated that the government simply could not continue to spend more than it raised.

''It is one important input to the government's considerations for the upcoming budget. While the government will not be providing an immediate response to each recommendation, our response to the National Commission of Audit report will be our first budget 13 May,'' he said.

The commission forecasts much of the growth in spending that will occur in 15 key areas, which will account for 70 per cent of the total growth in spending over this period.

Mr Hockey said the coming budget would be a ''call to arms for the Australian people''.

"If you have the capacity to work, we don't just want you to work, we need you to work."

Commission of audit chairman Tony Shepherd said the changes were merely advice to government but he acknowledged that the recommendations were designed to give the government the kind of policy fixes it was seeking.

"We've answered a simple arithmetic equation," he said of the overall savings task.

Pre-budget speculation has focused on a possible $6 co-payment for GP visits but the commission of audit has advocated a co-payment of nearly three times that at $15 – although less for concession card holders.

Mr Shepherd said that idea stemmed from a view that the system was being abused as Australians were visiting their GP an average of 11 times a year.

"Something that's free is not valued; this will give people pause to think, 'Will I go or not?'

"I just don't think Australians are that crook," he said.

The report comes as the government continues to send out mixed messages over a proposed deficit tax – a 1 per cent and 2 per cent loading respectively on the two highest income tax brackets aimed at raising about $10 billion over the next four years.

Also under consideration is a plan to claw back some of the $5.5 billion surrendered to farmers and the mining sector through the 38 cent diesel fuel rebate.

That prompted Liberal senator Cory Bernardi to break ranks by lashing his own party for what would be an "appalling" breach of faith.

"We went to an election promising no new taxes, no excuse, and no surprises; well, there certainly have been a few surprises already this week," he said.

He raised the concept of sovereign risk, arguing that investment decisions in mining and agricultural ventures had been based on the existing cost structure regarding fuel.

The brash comments are representative of a hostile mood in the Coalition party room over the proposed deficits tax and the Prime Minister's paid parental leave scheme.

The gold-plated plan has few enthusiasts and even the commission of audit savaged it, proposing instead that the already scaled back $100,000 maximum annual salary replacement for six months be replaced with average weekly earnings of $57,460. It wants the savings directed to childcare as a productivity enhancing measure.

The government now finds itself balancing an even more difficult public relations task leading into the budget with "courageous" commission of audit ideas, such as giving taxing powers back to the states, being privately scoffed at by ministers but officially not ruled out before the budget. 

Older Australians, the majority of whom supported the Coalition at the last election, would be among the hardest hit under the commission of audit approach, as benchmark payments in the age pension are gradually reduced over time to 28 per cent of average weekly earnings.

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