How much does working until 70 save the budget bottom line?

Last week, the Productivity Commission released a research paper on the ‘economic issues raised by population ageing’, which included a recommendation to raise the age for eligibility for the Age Pension to 70. This proposal has been widely condemned by interest groups including the ACTU and National Seniors Australia, with one group claiming that implementing the policy would ‘see grandmothers and grandfathers joining the dole queue’. A Grattan Institute report released yesterday also includes this proposal as one of the ‘tough choices’ that may be required to balance the budget.

Higher education savings - students pick up the bill

Image source: Vic Department of Education

The government’s Statement on Higher Education announces savings measures in three areas. Reaction from, and on behalf of, the higher education sector has been negative. The peak body representing universities, Universities Australia, has condemned the cuts.

Yet it is not the universities that will bear the brunt of the savings but their students.

Announcements end superannuation budget speculation?

Image source: QLD government

Following recent media speculation about possible changes to superannuation in the upcoming 2013–14 Budget and concerns about the inequity of tax concessions for superannuation, on 5 April 2013 the Government announced a range of measures to superannuation tax, contribution and age pension arrangements. The Government’s overall intent in making these changes was to ‘improve the fairness, sustainability and efficiency of the superannuation system’. So what are the major changes proposed by the Government and how do they contribute to fairness?

Public sector staffing reductions in the states and territories

Since 2011 the state and territory governments have introduced public sector staffing reductions as savings measures (some jurisdictions also had reduction programs in place prior to 2011). A summary of the reductions is provided below; ‘FTE’ is not a headcount but refers to full-time equivalent staffing levels.

For the Commonwealth Government, the 2012–13 Budget estimates a staffing reduction in the Australian Public Service of 3 074 FTE for 2012–13 to be achieved in the main by a combination of natural attrition and voluntary redundancies. In November 2011 the Government also increased its efficiency dividend rate to 4.0 per cent for 2012–13 (up from a rate of 1.5 per cent per annum).

In 2011 and 2012 the Queensland, Victorian, New South Wales and Northern Territory Governments commissioned independent reviews of public sector finances, expenditure and management. The federal Leader of the Opposition has stated that a Coalition government will establish a commission of audit to review Commonwealth Government operations.

Sibling rivalry: Baby Bonus and Paid Parental Leave

Image Source: wikimedia images

The Government has announced as part of the Mid Year Economic and Fiscal Outlook (MYEFO) that it will reduce the Baby Bonus to $5000 and freeze indexation of the payment for three years. Currently, the Baby Bonus is $5437 and indexed in line with changes to the Consumer Price Index (CPI) on 1 July each year.

The decision has been criticised by some as discriminating against 'stay at home' mothers because the Government did not also take savings from the Paid Parental Leave scheme. This post attempts to clarify the issues involved by briefly looking at the relationship between Baby Bonus and Paid Parental Leave.