Servicing Greater Sydney, Parramatta


As I foreshadowed in the April newsletter the long awaited Commission of Audit Report was released yesterday. As the scope of the report and recommendations are very broad I thought you would appreciate a very succinct summary of the issues.

A key theme is "business as usual is not a viable option for Australia".

As anticipated, the report focuses on the services provided by the public purse, who is accessing those services, and why. Co-payments are a recurring theme.

Key recommendations from the Phase 1 recommendations include:


  • Changing the age pension indexation arrangements to a new benchmark of 28% of Average Weekly Earnings
  • Tightening eligibility by:
    • Linking eligibility to 77% of life expectancy
    • Replacing the current income and assets test including means testing the family home and increasing the income withdrawal taper to 75%
  • Abolition of Family Tax Benefit B
  • New single means test for Family Tax Benefit A (maximum rate of the benefit paid up to a family adjusted taxable income of $48,837 and then phasing out at 20 cents in the dollar until the payment reaches nil)
  • Removing the Large Family Supplement and Multiple Birth Allowance
  • Increasing preservation age to 5 years below Age Pension age
  • Extending phased preservation age increase so preservation age reaches 62 by 2027
Health care
  • High income earners to take out private health insurance for basic health care and precluding them from accessing health insurance rebate
  • Co-payments for Medicare
    • General patients to pay $15 per service (up to the safety net of 15 visits then $7.50 from that point forward).
    • Concession card holders to pay $5 per service (then $2.50 once they have exceeded 15 visits).
  • Co-payments for some medications on the Pharmaceutical Benefits Scheme that are currently free
    Working parents
    • Paid parental leave scheme - Retains the 1.5% levy on large companies but scales back the scheme to cap at Average Weekly Earnings (currently $57,460) indexed annually
    • Child Care Rebate and Child Care Benefit replaced with one means tested scheme. Scheme would cover in-home care and another types of available care.
    Employment & Unemployment
    • Requiring unemployed people aged between 22 and 30 without dependants to relocate to areas of higher employment to access benefits
    • Minimum wage capped at 44% of Average Weekly Earnings
    Business incentives & assistance
    • Abolish the Export Market Development Grant amongst other grants
    • Scaling back Austrade and Tourism Australia into a commercial arm of the Department of Foreign Affairs & Trade
    • Abolishing sector specific R&D programs
    • Abolishing the Farm Finance Concessional Loans Scheme
    • Where a business has gone into liquidation without paying staff benefits, the Fair Entitlements Guarantee Scheme would be limited to a maximum 16 weeks redundancy payment and limit the wage base to Average Weekly Earnings
    • Medical indemnity schemes that subsidise the cost of indemnity insurance to be scaled back
    • Privatise government bodies that operate in commercial markets across the short, medium and long term including:
      • Short term
      • Australian Hearing Services.
      • Snowy Hydro Limited.
      • Defence Housing Australia.
      • ASC Pty Ltd.
    • Medium term
      • Australian Postal Corporation.
      • Moorebank Intermodal Company Limited.
      • Australian Rail Track Corporation Limited.
      • Royal Australian Mint.
      • COMCAR.
    • Long term
      • NBN Co Limited.
    Overall, the report recommends abolishing 7 Government bodies, merging 35, consolidating another 22 into the portfolio department, privatising 9, and reviewing another 26.

    What's next?

    The second phase of the report is focussed on efficiency and infrastructure. Among other elements it recommends the introduction of a road user charge.

    It will be interesting to see what the Government adopts in the Federal Budget on 13 May 2014.

    The full report can be accessed at 
     National Commission of Audit

    As usual, please do not hesitate to call us on (02) 9891 6100 should you wish to discuss how any of the points raised in the report specifically affect you, or click here to send us an email.

        Warm regards,


        Martin Roughley, Director
        Spry Roughley Services Pty Limited



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