Rudd Government disappoints with intergenerational report handling
The Rudd Government’s initial response to the latest intergenerational report was, to say the least, both predictable and disappointing, writes Mike Taylor.
The Rudd Government’s initial response to the latest intergenerational report was, to say the least, both predictable and disappointing. It is to be hoped that a more meaningful response will be contained in the May Federal Budget.
The intergenerational report released by the Treasurer, Wayne Swan, was the third prepared by Treasury, with the first two reports having been released by former Liberal Treasurer Peter Costello.
Indeed, it was the contents of the second intergenerational report that prompted Costello to introduce his so-called ‘work till you drop’ measures — the encouragement of older Australians to remain in the workforce for longer.
It is therefore telling that around three years later, Treasurer Swan’s launch of the latest report told a story with strong parallels to that outlined by his predecessor.
According to Swan, the report showed clearly that the ageing of Australia’s workforce would "present a particular set of economic and social challenges".
Swan warned that with proportionately fewer working-age Australians supporting a much larger population of older Australians, ageing and rising heath costs were expected to result in spending exceeding revenue by around 2 per cent of gross domestic product in 2049-50.
"The report highlights that productivity growth — producing more output with proportionately fewer workers — will be the major contributor to increases in living standards over the next 40 years," he said.
The Treasurer said that as well as pursuing its infrastructure and productivity agenda, the Government was also taking steps to remove impediments to workforce participation and provide incentives and rewards for those Australians who choose to remain in the workforce in their later years.
In other words, as it enters the last year of its first term in government, the Rudd Administration has not significantly advanced the intergenerational agenda beyond that initially put in place by the former Howard Liberal Government. What is more, it is unlikely to do so before electors again go to the polls.
Few governments implement meaningful policy change during their first term on the Treasury benches, but three successive intergenerational reports have provided an easily legible road map and it is one that should be followed as a second term priority. The easy political rhetoric must give way to action.
It goes without saying that a good start to the policy journey would be addressing the growing gap in retirement incomes adequacy by lifting the superannuation guarantee.
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