Audit fails the fairness test: ACOSS

The Australia Council of Social Service said that most of the recommendations contained in the National Commission of Audit report fail the fairness test, and has called on the Government to adopt a few but to reject the majority.

In responding to the release of the Commission of Audit report today, ACOSS CEO Dr Cassandra Goldie said, “the biggest failure is that this Commission never got the chance to look at the real problem which is public revenue. Revenue is more than $30 Billion down a year on pre GFC levels. The Commission tackles some areas of poorly targeted spending, but if the report was adopted, the community would lose many essential social protections and services.”

“The Commission came up with a radical proposal to give the States a share of federal income tax revenues, yet tax breaks for high income earners such as superannuation and negative gearing were out of scope.

“It is fair and reasonable to expect that governments to ensure that when any of us get sick we can get treatment; that when we lose our job, there’s a safety net to see us through the tough times; and that all children get a chance to a decent education.

“However, these reasonable expectations are under challenge by proposals to create a two tiered system in health and education that will result in decent services for those who can afford to pay and a second rate system for those who can’t. For this reason we reject the proposal of a GP co-payment that will severely impact people on the lowest incomes and those with chronic illness. It would lead to reduced visits to doctors and greater pressure on the hospital system.

“The Federal Government should not retreat from its responsibilities to ensure that everyone has access to affordable housing, and all children have access to quality schooling.

“Similarly we strongly oppose cuts to incomes for people doing it the toughest in our community – people with physical and mental disabilities, carers, sole parents, and younger people struggling to get into paid work, people on the maximum rate of age pension, and minimum wage earners.

“Pensions are already frugal and the proposed cuts to indexation, which would reduce the single pension by around $100 a week in decade’s time, and payments for sole parents by around $75 a week should be rejected, as well as the excessively tough 75% income test for income support payments.

“The pension cuts remove much of the increase that was granted in 2009, and there is no proposal to increase the abysmally low Newstart Allowance.

“Reducing funding of employment services and wage subsidies will make it even harder for unemployed people to find paid work, and forcing unemployed young people to move home to search for work will cause hardship without improving their job prospects.

“The Audit advances a number of welcome proposals to curb spending for people who arguably don’t need assistance. These include restrictions on health cards for retirees with financial assets over a million dollars, a fairer system of child care benefits and paid parental leave, opening up pharmacies for competition, potentially fairer means tests for the pension and family payments, and an increase in the preservation age for superannuation.

“But the Commission does not go far enough in clawing back poorly targeted programs. A balanced review, which looked at the revenue side as well as spending, would review superannuation tax concessions, one third of which goes the top 10% of wage earners. These cost the public purse around $40 billion each per year. They are growing more quickly than the age pension and they are unfair and grossly inefficient, yet they remain untouched.

“The Audit is a first step not the last, in our collective effort to develop a reform blueprint to put our national finances on a sustainable footing.

“This should not be left with a small handful of experts. We all have a stake in this, and we urge the government against rushing to wholesale adoption of these radical changes in the coming Budget without closer evaluation and taking them to the community at the next general election.

“In his election speech the Prime Minister said his government ‘would not leave anyone behind’. ACOSS agrees that as a nation we need to be prudent about the way we spend our money. That should mean cutting back on the generous supports for people who don’t need it, not crucial support services and payments for people who really do need it,” Dr Goldie said.

Media Contact: Fernando de Freitas – 0419 626 155


• Age Pension: single means test for income and assets.
• Tighter means testing of Senior’s Health Cards
• Increasing super preservation age, however, this should be equal to the age pension age.
• Paid Parental Leave: lowering the government contribution to average wages
• Childcare – a fairer, single payment to replace Childcare Benefit and Childcare Tax Rebate.
• Expanded role for allied health professionals in medical practice
• Independent pricing authority for PBS, and opening pharmacies up for competition
• Tighter means tests for family payments, excluding families on high incomes.
• Establish a policy process to review and simplify the structure of welfare payments.

• Freezing of tax revenue at 24% of GDP for a decade, which will severely limit provision of essential payments and services beyond about four years.
• States having access to personal income tax. Income tax is the fairest way to raise revenue and if the States compete tax rates down, fairness would be jeopardised.
• Abolish direct federal funding for affordable housing and homelessness programs
• Market rents for public tenants, offset only by the inadequate Rent Assistance payment.
• Cuts to pensions, including Age Pension, Disability Support Pension, Carer Payment and Parenting Payment: reduction to pensions of 28% of overall average wages (25% for Parenting Payment Single) instead of average male wages. This reduced indexation would cut single pensions by $100 a week in a decade.
• Cut in minimum wages which will increase poverty and could also lead to future reductions in Newstart Allowance.
• Tighter income test for pensions, Newstart Allowance and other income support payments, reduced at 75c in the dollar instead of 50-60. This will mean less money for people and less incentive to undertake part time work.
• Schools funding: transferring responsibility for schools policy and funding distribution, to States.
• Aboriginal programs – rationalising 150 programs into 67 (potential loss of programs). Converting some programs into vouchers for individuals
• Commonwealth grants: Abolition of financial management program with the exception of problem gambling. Also abolition of rural financial counselling program.
• Family Tax Benefits: abolish Part B payment. No alternative payment for single parents whose youngest is over 8 so their payments are cut. Low income couples would experience a cut in payments as well.
• Employment services – cuts to Job Services Australia services for people who are unemployed, making it even harder for people to find employment; including reduced wage subsidies for long term unemployed.
• Tougher and more frequent medical assessments for Disability Support Pension which would shift people onto Newstart Allowance which is $166 a week lower
• Increasing the Age Pension eligibility age to 70 without raising Newstart Allowance would cut income support for many older people by $166 per week;
• $15 co-payments to visit, restricted access to hospital emergency departments, and increases in the cost of medicines, will have the greatest impact on people on low income peoples and those with chronic illness.
• Extending private health insurance into primary health care services, risking a two tier health system where only those who can afford to pay receive a decent service.