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This paper proposes steps to move the Federal budget back to surplus in the short term.


The new Abbott government should address its self-identified budget emergency by cutting wasteful spending now. Reducing government will also help prepare Australia for its future fiscal challenges. There are some simple steps that can move the budget back to surplus in the short term.

The government should refocus its spending away from expensive and ineffective assistance to the middle-class and towards those in need. By refocusing family tax assistance, the government can save nearly $6 billion a year. A further $8 billion could be saved by ending industry assistance programs other than a select few aimed at research and development. Additional savings can be found by addressing inconsistencies in indexation of payments.

Another important step is to address the duplication of government departments at a state and federal level. By simply abolishing two of those departments (the federal departments of agriculture and education), the government could save up to $1.3 billion.

Further savings can be found in health care by ending poorly targeted or ineffective programs such as GP management plans and rebates under the Better Access to Mental Health Services scheme. A small copayment on Medicare services could save more than $1.4 billion.


Authored by Alexander Philipatos, Jennifer Buckingham, Jeremy Sammut, Robert Carling, Simon Cowan and Trisha Jha.

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