The Government will make $33.6 billion worth of savings to fund the return to surplus.
The Government will make $33.6 billion worth of savings to fund the return to surplus promised in 2012/13. Less than half of these savings will come from taxes, the balance will be funded from cuts to existing programs or policies previously promised but subsequently shelved.
Re-prioritising health expenditure will help make savings. From 1 July 2012:
Savings of $163.5 million will be made to the Pharmaceutical Benefits Scheme by sourcing more competitively priced medicines
Changes will be made to the Medicare Benefits Schedule safety net to reduce the opportunities for practitioners to charge excessive fees, saving $96.5 million.
The tightening of income support rules for Australians travelling overseas will also make significant savings. Currently, recipients of Government support payments can be overseas for 13 weeks and continue to receive their income support payments. This will be reduced to six weeks from 1 January 2013.
This change will affect the following benefits:
- Disability Support Pension
- Carer Payment
- Carer Allowance
- Widow B Pension
- Wife Pension
- Widow Allowance
- Partner Allowance
- Mobility Allowance
- Telephone Allowance
- Pension Supplement
- Utilities Allowance
- Seniors Supplement
- Clean Energy Supplement
- Low Income Supplement
- Pharmaceutical Allowance
- Rent Assistance
- Pensioner Education Supplement
- Concession cards
However, it will not affect recipients of the Age Pension or the Disability Support Pension who have been assessed, under the new rules coming into force on 1 July 2012, as having no future work capacity.
From 1 January 2014, age pensioners who choose to retire or travel for extended periods overseas, will have to have spent 35 years of their working lives in Australia to be eligible to receive the Age Pension. Currently the eligibility is 25 years and will take effect from 1 January 2014. From this date should an age pensioner choose to reside overseas for longer than 26 weeks, their pension will be adjusted by how many of the 35 years they resided in Australia while of working age.
Those already living overseas on 1 January 2014 will maintain the 25 years as a base calculation, but should they return toAustraliafor six months and subsequently leave, they will be subject to the new regulations.
These measures will save $178 million over four years.
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