Alan Kohler sits down with the Commission of Audit chairman Tony Shepherd to chat about the recommendations to fix the budget.
Treasurer Joe Hockey gets fired up about talk of the broken promise of no tax increases.
AN EXTRA fee of $15 to see the doctor, raising the pension age to 70 and measures to axe the jobs of 15,000 public servants are among recommendations to the Abbott Government to fix the budget.
ANALYSIS: Age pension firmly in COA's sights
The Commission of Audit's much-anticipated final report has been released, laying out 86 recommendations, offering savings of about $70 billion a year within a decade.
They include slowing minimum wage growth, a slower roll out of the National Disability Insurance Scheme and abolishing whole government agencies.
Document ... the Commission of Audit's much-anticipated final report has been released Source: News Corp Australia
SLASHED: SA could end up with lowest minimum wage on mainland
Following the release of the report, Treasurer Joe Hockey got fired up about reports the government might break its promise not to bring in new taxes by introducing its deficit levy.
"Frankly, can I say to you something - I mean, all this talk about broken promises and so on, of course we are endeavouring to keep our promises and we will," Mr Hockey told reporters in Parliament House.
Promises ... Treasurer Joe Hockey got fired up after the release of the Commission of Audit report. Source: News Corp Australia
"So please this idea, somehow, that everything we have ever said is going to be held against what has moved on us because the previous Government basically misled the Australian people about the state of the budget, is kind of ridiculous."
"However, we are keeping our promises, we are keeping our solemn promises."
Political editor Malcolm Farr says that many of the painful spending cuts the Commission of Audit report recommends are unlikely to appear in the upcoming federal budget.
Mr Hockey insisted that would mean that some of the initiatives it wants to roll out will have to be introduced after the next election, "so we can get a new mandate".
"But we can't have a do-nothing Budget and we will not have a do-nothing Budget."
Change needed ... the Commission of Audit report warns if the government continues a "business as usual" approach, Australia will face 16 years of consecutive deficits with net debt. Source: News Corp Australia
Opposition Leader Bill Shorten attacked the report, saying it showed how "twisted" Tony Abbott's priorites were for Australia.
Mr Shorten said hard-working Australian familes were today realising that "Tony Abbott's Budget will cost you more".
He labelled the report a "blueprint for Tony Abbott's broken promises" and a "plan to make sure that families get less while millionaires get more".
"This is an attack on health care, make no mistake about it," the Opposition Leader told reporters in Sydney.
"It is the argument for a new GP tax, a new hospital tax and more expensive medicines which Australians desperately needs."
He criticised the proposal to cut the pension and include the family home in a new means test, as well as the recommendation to put a "hand-brake" on the NDIS.
Anger ... Opposition Leader Bill Shorten says the report shows how "twisted" Tony Abbott's priorites are. Source: News Corp Australia
"I understand that in Budgets, tough choices do have to be made, but Tony Abbott is making is wrong choices for our future."
Greens Leader Christine Milne attacked the proposals, which she argued would hit every Australian family.
"This is a report that Tony Abbott wanted," she told reporters in Melbourne.
Senator Richard Di Natale, who had been chairing a committee into the audit, singled out the Commission's chair Tony Shepherd who he will be calling to demand answers.
"I'll be calling him in to a special hearing of the Commission of Audit inquiry to explain why he's prepared to give a kick in the guts to families right around the country and let the big end of town off scot-free."
"It's not good enough."
Not good .. Greens leader Christine Milne says the changes will hit every Australian family. Source: News Corp Australia
Mr Hockey refused to comment directly on the measures proposed in the report.
"We're not in the business of ruling in or ruling out today and why? Because we've got a process that we're going through in relation to this report and the first answer will be on Budget night."
The Government has already said some of the Commission's recommendations will be able to be implemented, others will be looked at and some will be ignored completely.
There won't be an immediate response to each recommendation, Finance Minister Mathias Cormann said.
Instead more will be revealed on Budget night in less than a fortnight.
Waiting game ... Finance Minister Mathias Cormann says there won't be an immediate response to each recommendation from the Commission of Audit. Source: News Limited
WORK UNTIL 70
The pension age should be lifted to 70 by 2053, up on the current scheduled increase of 67.
The current assets test should be scrapped it argues, and replaced with a means test for new recipients from 2027-28.
The family home should be included in the new test for those above $500,000 for a single pensioner in today's terms and $750,000 for couples, according to the report.
It also suggest the rate be wound back over time, in line with average weekly earnings.
EXTRA FEE FOR BULK-BILL SERVICES
Patients should be hit with a $15 co-payment for services currently covered by bulk billing, with the extra fee then halved to $7.50 after 15 visits a year.
Concession card holders would pay $5.
It would not only cover seeing a GP, but also services like blood tests.
Amid fears it would encourage people to turn up to emergency wards, it recommends State Governments consider bringing in a similar co-payment.
MINIUMUM WAGE REDUCED
The minimum wage should be scaled back, slowing growth in line with 44 per cent of national average weekly earnings.
It argues each state should also have its own, to avoid its workers being disadvantaged.
WELFARE SHAKE-UP
The Commission recommends Family Tax Benefit B be scrapped and recipients be rolled into Family Tax Benefit A, with the eligibility cap reduced.
Changes should be made so the Disability Support Pension is given to those in genuine need.
New assessment criteria should be implemented it, with the current income and assets test axed.
It should be replaced with a means test, like the age pension, which would include the family home for singles above $500,000 and $750,000 for couples.
Young people aged between 22 and 30, without children, who have been pocketing benefits for a year should lose their benefits if they don't move to high employment areas, the Commission also recommends.
PUBLIC SERVICE CUT
The Commission argues 15,000 fewer public servants would be needed if its recommendations, including cutting agencies and handing over some responsibilities to the states, were adopted.
That would represent five per cent of the current public service.
GOVERNMENT AGENCIES SCRAPPED
Seven government agencies, should be abolished, another 35 merged with others, 22 consolidated and nine potentially privatised.
It also recommends the Immigration Department and Customs be rolled into a mega agency.
POWER BACK TO THE STATES
The Commission proposes states be given "all policy and funding responsibility" for government and non-government schools.
It also argues more the States could pick up more responsibility in funding public hospitals.
PAID PARENTAL LEAVE WOUND BACK
The Government is being encouraged to lower the wage replacement cap to average weekly earnings, currently $57,460 a year, instead of Tony Abbott's plan which is based on the current salary.
Money saved should go towards childcare, the Commission recommends.
SLOWER NDIS
The Commission believes the current roll-out of the National Disability Scheme is "highly ambitious" and should be slowed down.
The recommendation would require the states to go back to the drawing board on agreements already struck.
HELP LOANS CHANGES
Students should have to start paying back their HELP loans when they earn the minimum wage, currently $32,354 instead of the current threshold of more than $51,000, the Commission recommends.
CAR INDUSTRY
Holden is leaving anyway, so industry assistance to them should stop now, the report recommends.
Abolishing the Automotive Transformation Scheme and a $215 million grant to Holden could be on the cards.
"Rather than relying on industry assistance, commercial discipline drives firms to reduce costs and improve quality to better meet customer demands," the report says.
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