May 2, 2014
So the Business Council types on the Commission of Audit want to return to a small federal government, the states being the primary deliverer of services like health and education and a competitive federalism. The big picture story is about government being smaller, getting out of the way of the market, reducing complexity, targeting welfare, and fixing a broken federation.
In wanting to return to the past the Commission the commission wants to substantially dismantle Medicare, cut down on the age pension, leave superannuation tax concessions unscathed, reduce Medicare to something mainly for the poor, hit middle-income families and make the treatment of welfare recipients much harsher. The Commission of Audit’s full report would dismantle the social safety net and cause the pain to be felt disproportionately by the poor.
The return to this kind of small government wont happen because the radical proposals of audit reports are not put into practice by politicians hoping for re-election. However a genuine problem of a budget shortfall in the medium term is being spun as an immediate short term budgetary crisis entirely of the previous government’s making. This crisis will leave future generations of Australians saddled with excessive debt. So drastic action is needed now.
To assert that Labor's reckless spending is the culprit behind the deterioration by the government ignores that the main reason for the decline in government's finances has been on the revenue side of the ledger. Revenue is down from 26 per cent to 23 per cent of gross domestic product in the past decade, while spending has remained at a relatively stable 25 per cent.