Are pensions in firing line for the Commission of Audit?
While newly elected Prime Minister Tony Abbott has been keeping a low profile, Treasurer Joe Hockey called a press conference yesterday to announce two major initiatives. One is the establishment of a Commission of Audit to review government spending and identify possible cuts, led by Chairman of the Business Council of Australia, Mr Tony Shepherd. Other members of the four-person panel are the former Liberal senator, Amanda Vanstone, former Treasury Secretary Tony Cole, state bureaucrats Peter Boxall and Robert Fisher. The commission’s brief is to identify duplication, wasteful spending and improve efficiency. It will release an interim report in January and a final report in March. Most experts believe five months is a very tight time period for such ‘ambitious’ terms of reference.
Despite the pre-election promises by both Mr Hockey and Prime Minister Abbott that there would be no cuts to health, medical research, education or defense, it seems Mr. Hockey is allowing himself some wiggle room, declaring on the ABC’s 7.30 Report that savings within these departments could still be rolled out. Former Treasurer Peter Costello noted that there are some entitlements that the Government cannot ‘keep affording to pay’. And the terms of reference of the commission indicate its ability to consider ‘co-payments, incentives and user charges’. So is the Age Pension in the firing line for the Commission of Audit? Quite possible, given Mr Hockey’s comment on his concerns about the ‘impact of Australia’s ageing population’.
Almost as an after thought, the second announcement at the press conference was Mr Hockey’s intention to raise Australia’s debt ceiling by a massive 67 per cent, from $300 billion to $500 billion. The Treasurer noted that projections show the country will reach its current ceiling in December this year and he wanted a ‘buffer’ to provide stability and remove his need to return to Parliament for extra debt allowances. He compared Australia’s need for stability to that of the USA, as evidenced by recent events, although our current debt ceiling of $300 billion is dwarfed by that of the USA’s $17 trillion.
Read more at SMH.com.au
What a difference a day makes. As does moving from Opposition to Government. In Opposition Mr Hockey felt that raising the debt ceiling by $50 billion was a catastrophe. Now he is Treasurer, he wants an extra $200 billion as a buffer. Last night on the ABC’s 7.30 Report, Mr Hockey was interviewed by fill-in host, Annabel Crabb. Ms Crabb did a mighty fine job of asking Mr Hockey how this increase in our debt ceiling is consistent with a party which repeatedly stated ‘Australia must live within its means’ when in opposition. Mr Hockey defended his position, stating, “I can’t stop the debt which Labor has accrued”. Ms Crabb pursued her point, asking if the proposed Paid Parental Leave scheme was consistent with ‘living within our means’ and if public funding of Ministers attendance at weddings, sporting events and buying investment properties in Cairns was also deserving of scrutiny.
What was not asked, but also needs to be noted, is that appointing two members to the Audit Committee from the (very) big end of town – the Business Council of Australia – is a clear signal that the social welfare sector will have very little impact on expenditure review and possible cuts in Mr Hockey’s first budget in May next year.
So what is going on here? We are in free-fall, economic crisis, and debt up to our ears one day, when Labor is in power, and now casually jacking up that debt ceiling by 67 per cent as a buffer. Some buffer! The sheer arrogance is so breathtaking, it’s almost admirable. Mr. Hockey was sworn in as Treasurer on 18 September. He has been in this role for barely five weeks. His L-plates are brand new and squeaky clean. And yet he wants an extraordinary level of debt to give himself massive leeway to run our economy. And will rush through an audit of our Government spending, advised by business leaders and former Liberal cronies. Should we be worried? Yes, we should. Are older Australians dependent on the Age Pension at risk? Definitely. Centrelink services are now moving online and call times are stretching out to hours, not minutes, as they battle to handle current social service clients. Things will only get worse. Mr Hockey should take his role seriously and move slowly and carefully. Jacking up our debt ceiling by 67 per cent is a scandalous and dangerous first move.
What about you? Do you think the request for an extra $200 billion in debt ceiling is reasonable?