Government cuts seen as essential for economy despite impact

REDUCTIONS in government spending are necessary even though they will impact on families in Central Queensland, according to Professor John Rolfe.

The CQUniversity economics professor (pictured) made the assessment in the wake of the Abbott Government's Commission of Audit recommendations, which will help shape the May 13 federal budget.

"The audit doesn't leave a lot of areas untouched. Most people will be impacted, depending on the extent to which the government implements the recommendations," Prof Rolfe said yesterday.

"What will make it through is the fascinating question. There are so many unpalatable measures in political terms it's unlikely they would implement all of the recommendations."

Prof Rolfe said that Canberra and the capital cities would be hardest hit because of the planned rationalisation of the public service and its functions.

Central Queensland would be less affected because of its reliance on the resource and agricultural sectors, rather than government employment.

Ultimately, he said, the moves to reduce public expenditure were essential to avoid government becoming too much of a drag on the economy.

Prof Rolfe said the audit had moved to address middle-class welfare and that was where the main impact would be felt locally.

"Some of the rationalisation to family benefits would affect families," he said.

"Those at the upper end of the middle income scale are the ones who would lose.

"But CQ would not be different to other parts of Australia in that regard."

Prof Rolfe said he was not expecting huge impacts on pensioners, although those with greater assets could find themselves paying more for health and other benefits.

On the cards?

Commission of Audit recommendations

A $15 co-payment for all Medicare services

  • Raise the pension age to 70 years by 2053, while including the family home in means testing for the aged pension
  • Cut 15,000 public service jobs
  • Lower paid parental leave scheme salary cap to average week earnings (currently $57,460) and use savings for expanded child care payments

Topics:  central queensland economics federal budget 2014

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