Gazing into the fiscal crystal ball: the first Intergenerational Report

One key lesson to emerge is the need to look at ways to help people on low incomes save for their retirement. The current system remains inadequate in this regard and is in need of a major overhaul. It is imperative that pensions and superannuation systems encourage savings for those on lower incomes, instead of wasting half the $4 billion per annum tied up in superannuation on tax concessions for contributions by high-income earners who don’t really need this support.

A further problem with the report and the Government’s response to it is a somewhat narrow focus. Issues such as access to affordable housing, the needed investment in essential infrastructure, resource distribution, educational opportunity, the strain on carers, our treatment of the environment, and Indigenous wellbeing, are largely ignored. But all of these are essential ingredients to a healthy, economically and socially buoyant Australia and the enjoyment of high standards of living across the entire population.

In bringing down the Budget, the report is used not to set out a long-term vision for achieving that Australia, but as a tool to justify cuts in support and services to the most vulnerable.

What is needed is a population policy that seeks to ease the tensions between female workforce participation and child rearing – including equitable paid maternity leave; labour market policies to boost labour force participation and reduce employer discrimination – especially among mature age workers; a fair system of funding for future health costs; and, a comprehensive immigration strategy.

Although the effects are not likely to kick in for another 15 years the report rightly suggests planning should begin now.

Projections of federal Government expenditure sensitive to population ageing: