Prime Minister Tony Abbott flags cuts to spending growth for health and education

Updated

Prime Minister Tony Abbott has flagged he wants to curb spending growth in health and education in the longer term.

Mr Abbott promised at the election he would not make cuts to the overall health and education budgets.

But in last night's speech to the Australian-Canada Economic Leadership Forum in Melbourne, the Prime Minister suggested he would move to curb spending growth to help balance the budget.

"We will keep our pre-election commitments to maintain health spending and school spending, but we must reduce the rate of spending growth in the longer term if debt is to be paid off and good schools and hospitals are to be sustainable," he said.

"This year's budget will put us back on the right track. It will start the process needed to avoid the $123 billion of prospective deficits and the $667 billion of gross debt that this Government inherited.

"You can't spend money until you can have the means to pay it back. As this Government said pre-election, within three years, Australia will be on track for a sustainable surplus."

We asked which areas should be targeted in helping to balance the budget and whether the budget needs to be balanced. Here's what you had to say.

Mr Abbott reiterated the Government's plans to repeal the carbon tax and the mining tax, and focus on infrastructure spending.

"We will build the infrastructure that we committed to before the election and invest the proceeds of further privatisations in more economic infrastructure that passes cost-benefit tests," he said.

But Opposition Leader Bill Shorten says he is concerned about what the Government could have planned.

"Health care in this country should depend on your health needs, not what you can afford to pay," Mr Shorten said.

"The Abbott Government's championing of a GP tax, which increases the cost of living and makes it more difficult for sick people and expensive for sick people to seek the health care they need, that is not the Labor way.

"Labor believes in universal accessible health care, the Abbott Government is itching to further cut health care and attack Medicare, and Labor will stand up for health care in this country and Medicare."

Education Minister Christopher Pyne says no spending cuts have been flagged.

"[The Prime Minister] said that the current growth in education and health expenditure was unsustainable and that is true," he said.

"Labor has been spending massively beyond our means for the last six years. He didn't flag that there'd be any cuts to health and education."

Business Council of Australia wants to cut red tape

The Business Council of Australia wants the Government to cut spending, and implement tax and workplace law reform in the May budget.

The tough measures are outlined in the group's pre-budget submission, which says they are necessary to boost growth and a return to surplus.

It believes a swift removal of inefficient state taxes and simplification of business tax will boost economic growth.

The council's chief executive, Jennifer Westacott, says the priority is cutting red tape.

"If you can get rid of the worst of the regulation that is stopping business from being able to change, our inflexible workplace laws, our long lead times for environmental approvals, those sorts of things will have a big boost to business confidence and an immediate effect," she said.

Ms Westacott says increasing the age pension and retirement age above the current 65 need to be considered.

"We need to remember that you can make changes to these very big government outlays over a long period of time," she said.

"We need to look at the whole area of welfare and say, 'can we sustain welfare being diluted across many people and many income brackets versus targeting to those in most need?'"

Penalty rates, overtime and leave loadings need review: BCA

Ms Westacott also says a "cold, hard look" at workplace laws is needed and that they may be "harming Australia's competitiveness and reducing companies' flexibility to change and adapt".

And she says entitlements such as penalty rates, overtime and leave loadings need reviewing.

"[Penalty rates] certainly applied many years ago, but something like retail or hospitality, which is now a 24/7 industry, are those things appropriate in the modern day?

"Who is winning and losing from that? How many small businesses are having to employ their kids on a Sunday because they can't pay the penalty rates?

"How many people are not opening that shop because they think, 'well, you know what? I can't afford that'."

Topics: education, health, budget, government-and-politics, australia

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