A hairshirt budget

Well, get ready for it, an experiment in democratic politics, an unpopular budget aimed at no constituency at all:

Radical reforms to health and education will be outlined today in a searing assessment of federal finances that also calls for the family home to be included in the asset test for the age pension.

Action on the asset test is a key recommendation in a far-reaching review that identifies huge cuts to “middle-class welfare” to prevent budget spending climbing to $690 billion within a ­decade.

Tony Abbott will also be urged to scrap federal agencies and ­delegate more services to the states as part of a blueprint from his commission of audit that is ­already sparking resistance from key cabinet ministers.

The closely held report stops short of calling for the dismantling of federal health and education departments but warns of a massive cost to taxpayers from the duplicated effort between Canberra and the states.

In a deeply controversial finding, the commission identifies billions of dollars in savings from including the family home in the eligibility test for the age pension, arguing it is unfair for ordinary workers to subsidise pensions for the wealthy.

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