(Transcript from SBS World News Radio)
Federal Treasurer Joe Hockey is warning an older Australia 40 years from now, with fewer workers to support economic growth, will put deep pressure on the country in several areas.
He has pointed to health services, aged care and the environment in handing down his long-awaited intergenerational report.
The report outlines the challenges facing the economy as a result of the ageing population.
Amanda Cavill reports.
(Click on the audio tab above to hear the full report)
The report finds Australians will live long and be healthier over the next 40 years but must be prepared to work well beyond age 65 if they want to maintain their standard of living.
The report is the fourth in a series of five-yearly reviews introduced by former Treasurer Peter Costello.
The onetime Liberal Treasurer released the inaugural edition with his 2002 budget to highlight the challenges Australia faced with an ageing population.
This year's report shows, by 2055, the number of people over 65 is expected to double and the number of people of traditional working age is expected to fall by almost half.
Mr Hockey says the report estimates, by 2055, the population will be 40 million, versus 24 million today.
And he says average economic growth is expected to be slower over the next 40 years than in the past 40.
The Treasurer has highlighted the need to encourage more people to work more.
He says there is a need to harness what he calls an ageing boom of older workers, put more women in paid work and get younger Australians into jobs.
"The question is how do we pay for our future? Participation. We need that grey army. It's hugely important. And that's about attitudinal change in business, it's about policy change. We also need to increase female workforce participation. And that's, in a sense, happening at any rate, because you can't live in a capital city in Australia without having at least one-and-a-half incomes. It's very challenging. Productivity, increasing output per hour, investment in new capital and infrastructure, innovation and technology, entrepreneurship and competition, skills and education."
Mr Hockey says measures proposed in last year's budget would totally change the long-term outlook.
He cites changing the indexation of the aged pension, raising the retirement age to 70 and cutting Commonwealth payments to schools and hospitals.
Mr Hockey also says, if budget measures mired in the Senate are not passed, the deficit would be 6 per cent of GDP and the net debt would be $2 trillion by 2055.
He says, without the Government's proposed policies, or alternative measures with equivalent impact, the budget would not return to surplus at any point over the next 40 years.
But the Treasurer says he is using the report simply to start a conversation about where the country is going to be in 2055.
"The purpose of this Intergenerational Report in this shape is to begin a conversation with the Australian people. Every town hall, every street corner, over every barbecue, we want Australians to embrace the future. It's a great future. Our nation has a fantastic future. But we've got to own it. We need to individually own our destiny, and this is a conversation that we know the nation wants to have, so we are going to work with the Australian people to develop the policies ahead that are going to make a difference to their quality of life."
To prepare for the future, the report says, there needs to be a simpler and fairer tax system, reforms to government service
delivery and better use of new technologies.
But Opposition Treasurer Chris Bowen says the document is too politicised to be taken seriously.
"An Intergenerational Report should be used to lift the public debate, to move out of day to day issues of politics and to talk about a vision for the future of Australia. This Government and this Treasurer are just incapable of doing that. This Treasurer uses the intergenerational report for political purposes, talking about the past. His report contains eight pages on the future and 80 pages on the past. This is a Treasurer and a Government stuck in Opposition mode and unable to provide a vision for the future."
Mr Bowen says Australia needs to look at reforming the superannuation system, discuss the level of skilled migration needed for the economy and move to increase productivity.
Greens Leader Christine Milne says the report is a ridiculous document that hardly mentions the dangers of climate change.
"You can't take this report seriously in any which way. All they do is go on about how much more everything's going to cost. They don't talk about the opportunities that are there. They don't talk about how much we need to invest in education and research and development and move away from 'dig it up, cut it down and chip it away.' It is an ideological, political-spin, rubbish document, and that's how it should be seen. And, frankly, it should go straight into the recycling bin."
The Treasurer says the Coalition will take policies to the next election that set out tax, workplace and productivity reforms.
