At less than two weeks before the May 13 budget, the release of the government’s long-awaited National Commission of Audit is as transparently political as the report’s recommendations are purist.
Which is to say the Audit Commission’s recommendations contain a mix of politically achievable and politically toxic measures. These measures will inform, but not dictate the budget, with the recommendations that are not adopted becoming almost as important, in a political sense, as those embraced.
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The government says it's not the budget, but its Commission of Audit is recommending sweeping spending cuts.
Invariably governments like to exaggerate the severity of decisions looming in a budget so that when it is finally tabled, the final blueprint comes as a relief.
This time is no different except that it is.
Treasurer Joe Hockey has raised expectations of a horror budget, but he has also warned ad nauseam of the need to end the age of entitlement – of the desperate need for governments to make the big fiscal changes required to arrest long-term worsening problems.
The Audit Commission is the objective evidence he needs to justify such decisions.
If anything, that means he will be marked down if he “squibs it” to borrow from the current Coalition talking points.
The guiding philosophy of the commission’s reports will surprise no one.
Compiled by an economically dry panel, chaired by one of the nation’s most powerful business leaders in Tony Shepherd, the common theme is cutting back government expenditure and clamping down on entitlements.
Where you receive a benefit, government assistance, indeed any federal support at all, expect either to lose it or to see it trimmed – often through a harsh tightening of eligibility. More rigorous and comprehensive means tests are the tool of choice and would be applied to nigh on everything from age pensions, to carers’ payments, family payments, and the dole. Indeed, the disgracefully low Newstart allowance (currently $36 a day) would be harder to get, harder to keep, and would cut out faster if you show the initiative to undertake part-time work.
Massive cuts recommended
Pensioners, students, low-wage earners and parents are among those who would be worse off under the recommendations of the Commission of Audit.
These harsher taper rules would apply to other pensions as well.
Medicines, GP visits, and hospital emergency attendances would also attract user-pays rules with a steeper co-payment advocated than has been flagged.
Students, too, face higher costs, and more expensive loans for university.
On the government’s end of the bargain would be greater efficiency, less duplication, and a radical withdrawal of the Commonwealth from key responsibilities such as health and education.
The states are the new black.
This is the detail behind ending the age of entitlement. You do more for yourself and government does a lot less. It’s a harsher Australia but, Hockey will argue, it’s also a more sustainable one.
Hockey stresses the point: “This is not the budget."
That much is true. There are things in the Audit Commission no government could seriously undertake without a serious political damage. The federal state realignments contain more than a hint of fantasy.
But many will be adopted as well.
We just don’t know which.