Australians To Suffer "Pain With A Purpose" To Heal Budget

Australian Prime Minister Tony Abbott is introducing cost-cutting measures for Australians and across government (DPA).

By Sid Astbury (DPA)

SYNDEY — Australians will work until they are 70, pay to visit the doctor, get less in welfare benefits and pay more for petrol as the new government moves to curb public spending and pay off debt, the government said Tuesday.

Prime Minister Tony Abbott warned of "pain with a purpose" in his first annual accounting since September's election victory.

"This is a problem-solving budget because we do have a very serious problem of debt and deficit, stretching as far as the eye can see," Abbott told local radio.


More than 70 government agencies will disappear or be merged and up to 16,000 civil service jobs will go.

A temporary deficit-reduction levy will see the highest earners paying more income tax. Fuel costs will rise after an excise tax hike and tighter qualification rules for welfare payments will see fresh assessments for those claiming disability pensions.

It will no longer be possible to draw a disability pension and live abroad. School-leavers will not be able to go straight on the dole.

"Yes, there's got to be short-term pain but it's pain with a purpose," Abbott said.

In a promise to share the pain, a perk that gives former politicians free domestic air travel will go. And Abbott said he personally would be stung for 6,500 Australian dollars next fiscal year by the debt-reduction levy.

To boost the labour-participation rate, companies that take on workers over 50 stand to reap a bounty of 10,000 Australian dollars (9,300 US dollars) two years after employing them. The incentive payments will rise in increments the longer the person stays employed.

The pension age is to rise in stages to 70 by 2035.


This year's budget deficit is expected to come in at 38 billion Australian dollars – a sum inflated by a 10-billion-Australian-dollar transfer from the treasury to the central bank.

Economists are forecasting a deficit of 30 billion Australian dollars for the fiscal year beginning July, with the budget moving from deficit to surplus within a decade.

The economy is growing at a below-trend 2.8 per cent a year, inflation is below the central bank's 3-per-cent target and unemployment has likely peaked at close to 6 per cent.