Who's running Fairfax these days? Formerly able to be relied on to put the best possible spin on matters for Labor, at least on most topics, they seem to be increasing joining News Ltd with the worst possible headlines for articles. Such as the above.
Anyhow, the actual body of the story is kind of interesting, more for the point as to how governments can (or cannot) save money:
The Grattan Institute says that while notionally on track to surplus at the moment, the combined total of state and Commonwealth budget deficits could reach 4 per cent of gross domestic product by 2023, which is about $60 billion in today's dollars and would be about $100 billion in 10 years' time.
"Initiatives such as the national disability insurance scheme, the education reforms, direct action on climate change and parental leave are only a small part of it," Grattan Institute chief executive John Daley said.
"The big driver, costing $30 billion, is extra spending on health. Contrary to popular belief, the extra spending isn't being driven by ageing. It's that compared to 10 years ago today's 60-year-olds see the doctor more often, have more tests, face more operations and take more drugs. We are getting something out of the extra spending: more people are staying alive. But the question is - who is going to pay for it?"
The institute also believes welfare spending will have to climb because the present Newstart unemployment allowance is unsustainably low. It says company tax revenue, mining and carbon tax revenue and general tax takings will slide as a proportion of the economy as the price of exports slips.
"The problem is the attractive solutions won't buy that much money," Mr Daley said. "Cutting middle-class welfare won't be enough …''
''Even if you axed the baby bonus, the Schoolkids Bonus and parts of family tax benefit B that go to high earners you'd only make $4 billion.
"Eliminating government waste won't help much either. Axing the Commonwealth departments of Education and Health might save the wages of 5000 public servants, but that's only around half a billion.''
The Grattan Institute says the gap can only be closed by higher taxes, meaning that the days of "painless" budget fixes are over.
"The places to look are company tax and company tax concessions, income tax and goods and services tax,'' Mr Daley said. ''The old idea you can introduce a change with no losers, at least none earning less than $100,000, won't work. Everyone will have to share the pain.''
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