12 - Financial Implications
The Commission has made 64 Recommendations across a range of activities and programmes, consistent with the objective of achieving a surplus of 1 per cent of GDP by 2023-24.
Most of our suggested actions go to the structural design of the biggest and fastest growing programmes. A detailed portfolio‑by‑portfolio review should yield further significant additional savings but insufficient to fix the underlying fiscal problem.
The Commission has prepared estimates of indicative savings from its Recommendations. However, without decisions on detailed programme design and timing of implementation — which are matters for the Government — it is not possible to be definitive.
Detailed costings undertaken by Government as part of the Budget process would give greater clarity around the financial implications of the Recommendations.
The Commission expects that these more detailed costings would yield modest savings in the early years rising to some $20 to $30 billion per year by 2017-18. By 2023-24, the savings could grow to some $60 to $70 billion per year.
These estimated savings do not factor in the additional savings from lower public debt interest costs arising from lower levels of Commonwealth debt which could be in the order of $15 to $20 billion per annum by 2023-24.
Chart 12.1 illustrates the potential magnitude of the savings.
It should be noted that the Commission has not included in its projections the Government’s commitment to increase Defence expenditure to 2 per cent of GDP.