TAX breaks for the wealthy should be scaled back and the private health insurance rebate abolished under a community sector plan to save the Federal Budget more than $10 billion by 2016-17.
The ambitious plan was laid out in the Australian Council of Social Services' pre-budget submission released yesterday in a bid to redirect savings to help Australia's poorest.
Under the social service group's plans, the Abbott government could slash as much as $18 billion in spending to 2016-17 and reinvest about $7 billion to increase welfare allowances.
As Treasurer Joe Hockey begins considering budget submissions from across the Australian community, the council has called for a budget that is "a lot fairer than the last one".
Under its plan, the aged pension assets test would be tightened; seniors' supplements and extended Medicare safety net would be abolished.
The group also called on the government to reform negative gearing, reduce capital gains tax breaks for small businesses and curb the use of trusts used by wealthy Australians to limit their personal income tax.
Savings could then be ploughed into increasing welfare allowances by $51 a week, more investment in rent assistance and youth unemployment programs, affordable housing, dental care and Aboriginal medical services.
ACOSS chief executive Dr Cassandra Goldie said the sum total of the measures would help to "restore the integrity" of the nation's tax system.
"When two thirds of the structural budget deficit is due to declining revenues, we need a serious effort to restore revenue to adequate levels," she said.
"Cutting deep into vital social and economic investments and services is the wrong approach and will cost us more in the long run."
The government began accepting submissions to its 2015 budget earlier this month.
Update your news preferences and get the latest news delivered to your inbox.