SHANE WRIGHT ECONOMICS EDITOR, The West Australian October 2, 2010, 2:55 am
Qualifying for the age pension may need to be made tougher and spending slashed in areas including defence to keep the Budget in the black, the Finance Department has warned the Gillard Government.
In a series of documents presented to new Finance Minister Penny Wong and made public after a Freedom of Information request from The West Australian, the department warned the forecast Budget surplus for 2012-13 could already be in trouble.
The Government has made much of its forecast $3.8 billion surplus for 2012-13.
But according to Finance, the Government's deal to bring forward spending on rural and regional hospitals - done to win over support of key independents - meant it had to find $2.4 billion worth of savings over the forward estimates.
The 2012-13 surplus is partly dependent on achieving a good price for the sale of spectrum freed up by the move of free to air television to the digital network.
Finance also warned that costs, such as the overseas deployment of troops amounting to $1.7 billion a year, was eroding the Budget bottom line.
To help bring the Budget under control, Finance outlined a series of spending cuts to Senator Wong but these have been blacked out in the publicly available documents.
But defence is picked out as one area where savings can be made.
One document spoke of the scale of the fiscal task ahead and the opportunity for the Government to re-assess the strategic posture and funding of defence.
According to Finance, cost blowouts in the management of asylum seekers is growing quickly because much lower numbers of detainees had been assumed. The department warned that the ageing population and the pressures on the health and aged-care system would require major cuts to those perceived most able to afford them.
"It will require a re-evaluation of who pays for health and aged-care services and whether more of the burden should fall on those users who have the capacity to contribute more than at present," it said.
"Measures such as tightening eligibility for the pension and increasing the superannuation preservation age to the age pension age would improve the long term fiscal sustainability of the system."
