National Coalition unveils sweeping public-sector cut plan without tax hikes

The National Coalition is set to release a budget proposal on Wednesday that focuses on substantial direct cuts to public finances, explicitly ruling out any tax increases. The party plans to phase the adjustments throughout the upcoming election cycle, with the full impact expected by 2031. The draft calls for a wide-ranging overhaul of the public sector, proposing reductions in welfare regions, municipal structures and state agencies, and reallocating savings to initiatives that boost economic growth, security and reform funding.

It also suggests lightening payroll taxes, maintaining that the fiscal challenge stems from excessive public outlays rather than insufficient tax rates. Long-term goals include consolidating welfare regions into a 5+1 model, encouraging voluntary municipal mergers with new incentives, and merging several central offices, such as the Employment, Development and Administration Centre and the Continuous Learning and Employment Service. The proposal also outlines reforms to pension and social-security spending, aiming to curb indexation and contain cost growth.