The Australian fiscal crisis
Australia gives us a good picture of what NZ might be facing if we had continued with massing increases in spending, as proposed by Labour.
Australia, like NZ once did, faces a structural or permanent deficit. Turning it around will not be a quick thing. An Audit Commission has just identified 86 ways to reduce spending by $70 billion a year – which would get the Government back into surplus by 2023.
The recommendations are large, and many will not be politically palatable. They include:
- End of universal health care and a $15 charge for doctors visits
- Cutting 15,000 public service jobs and selling state-owned assets
- Slower rollout of the NDIS and raising the pension age to 70, while including the family home in means testing for the aged pension.
- Abolish seven Commonwealth agencies, merge 35 and privatise nine
- Reject paid parental leave in favour of focusing on child care
- Strip the dole from young unemployed people who don’t move to areas with jobs and freeze the minimum wage for 10 years
As I said, some quite unpalatable. But both the Government and the Opposition will have to produce their own policies on how to get back into surplus.
Meanwhile in NZ, we will hopefully have a Budget in three weeks showing a return to surplus next year.
Political commentator David Farrar posts at Kiwiblog.