The West

Families, elderly big losers in Budget
Doing it tough: Pensioners will feel the pinch. Picture: Getty Images

Families and pensioners will carry the weight of the Abbott Government's efforts to repair the Budget bottom line if its tough measures get through the Senate.

Independent analysis of spending cuts also reveals the big cost of the Government's paid parental leave policy.

The Government this week played down the trouble facing a string of Budget measures, including changes to the age pension, fuel indexation and family tax benefits.

But the Parliamentary Budget Office says the savings over the next decade are worth more than $116 billion. In 2024-25 alone the measures would improve the Budget by $19 billion.

A breakdown of those measures, however, reveals that a handful are pivotal to structural improvement of the Budget.

The planned change to age pension indexation will, within a decade, be worth $6.9 billion a year. And changes to family tax benefits will save $5 billion by 2024-25.

With changes to the disability support pension, the PBO estimates more than $71 billion of $116 billion in savings will come from these three measures.

The PBO's figures show reintroducing fuel excise indexation will raise $39 billion over the coming decade.

But $17 billion of that will go back to businesses as part of the fuel tax credit scheme.

The PBO, which focused on 21 areas of spending, says that even with the Government's planned measures, spending as a proportion of GDP will remain about where it has stood for a decade.

"Sheer arithmetic dictates that it is very difficult to reduce overall growth in Australian Government spending without reducing the pace of spending in these programs," it said.

One program facing big growth is the paid parental leave policy.

Over 10 years, it would cost more than $62 billion. The current scheme would cost less than half that. The leave scheme, the national disability insurance scheme, GST grants to States and Defence are expected to be the fastest growing areas of spending over the coming decade.

The PBO notes Federal plans to "significantly" reduce funding for schools and hospitals from 2017-18. The cuts will save Canberra money but are likely to put pressure on State Budgets.

Prime Minister Tony Abbott said the Government was determined to cut spending but would consider alternatives put to it.

The West Australian

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