20 years’ on – Intergenerational Report central themes unchanged

ANALYSIS

Amid all the media reporting around last week’s release of the 2023 Treasury Intergenerational Report it became obvious that the Government was leveraging the document to push forward its policy positions when, in reality, the report was very little different to the 2002 iteration.

A comparison of the 2023 report and that of 2002 reveals no change to the essence of Australia’s emerging demographic and therefore economic reality – dealing with an ageing population.

Indeed, readers of the 2023 report would recognise most of the headline issues of the 2002 report which I publish here:

• Planning for the challenges of an ageing population
• Examining the outlook for future budgets
• More older people, fewer younger people
• Spending on health, aged care and age pensions to rise
• Demanding high-tech health and better medicines
• Many more people needing aged care
• Super savings keep age pension spending down
• Encouraging more people to join the workforce
• Fewer young people, lower education spending
• Living within our means

In other words, the realities confronting Australia have changed little over the past 20 years but what has changed is the policy priorities of the Governments of the day and, for the current Albanese Labor Government, there is an emphasis on further leveraging superannuation savings to take the pressure off the Age Pension.

For what it is worth, the executive summary of the 2002 Intergenerational Report starts off on the note that:

“Australia, like most industrialised countries, is experiencing an ageing of its population. This is already beginning to place some pressure on government spending. However, much larger pressures are expected to emerge when the ‘baby-boomer’ generation starts reaching old age in the middle of the next decade.”

In 2023, the Intergenerational Report noted that:

“Australians are living longer with more years in full health and more time using government-funded services. Increased longevity, alongside low fertility rates, means the population will continue to age over the next 40 years. The number of people aged 65 and over will more than double and the number aged 85 and over will more than triple.”

The biggest difference between the 2002 and 2023 Intergenerational Reports is the recognition of the impacts of technological change and climate change but where the ageing population and pressure on the Budget to fund health care and the Age Pension are concerned, little has changed and superannuation remains the core answer.

Little wonder, then, that Industry Super Australia (ISA) was last week stressing the relevance of superannuation and the fact that “super is already easing the cost burden of the pension” noting that about half of the nation’s newly-retired have enough super savings and private savings so that they do not qualify for the pension.

Equally little wonder that the Association of Superannuation Funds of Australia (ASFA) was prompted to call for even more changes to the superannuation policy settings including raising the upper income threshold for the payment of the Low-Income Superannuation Tax Offset and the superannuation guarantee being paid on parental leave.