Thursday, 11 February 2010
Matters of Public Importance
Dilemma or deception? That is the question that needs to be asked about the government’s spin on the recently released Intergenerational report. The dilemma is how to plan for a future with a growing disproportion of older people and still balance the budget. The deception is government propaganda that would have us believe that older Australians are a burden. Older Australians are at risk of becoming a scapegoat. To paraphrase the Old Testament’s Leviticus, older Australians are the government’s symbolic goat sent by the high priest into the wilderness with the sins of the people laid on its back.
The challenges cannot be realistically addressed if the government is preoccupied with looking for easy targets. The government will make older Australians the scapegoat and peddle this propaganda to frighten us into believing that there is a need to reduce services, increase taxes, massively increase the population by migration and force older Australians to work till they drop. The challenges highlighted in this Intergenerational report are not new and should not come as a surprise. The purpose behind this report should be to enable the government to plan effectively for the future, not to enable the government to intimidate older citizens.
Basically the report argues that government spending will outgrow revenue by 2050. In an article in the Sydney Morning Herald of 8 February titled ‘Intergenerational tale distorts ageing problem’, leading economic writer Ross Gittins says the budgetary cost of an ageing population is ‘exaggerated’. He unmasks the deception when he posits that the government makes its case by:
… lumping in with the rising cost of the age pension, aged care and healthcare spending directly related to ageing, the projected growth in healthcare spending arising from a larger population and the populace’s predicted ever-greater demand for more and better healthcare.
The kindest complexion you could put on that is that it is very disingenuous of the government, but I will leave others to make that judgment. The article goes on to point out that the actual budgetary cost of ageing is both ‘modest’ and ‘manageable’. The real problem is how we fund ‘the expected strong growth in the quantity and quality of health care’ for everyone. That is a problem which is not just to do with ageing. Rather than blame the blow-out in costs on seniors and target cuts to health services to seniors, the government needs to resolve to fix the entire health system, a core election promise it has not yet fulfilled.
As remarked by Mr Gittins, if the government wants to cap taxation at 23.5 per cent of GDP and gloss over the role that increasing taxes or holding off on tax cuts could have in addressing the fiscal gap, there is no other way than to make older Australians pay. We have already seen this in the government’s asinine cost-saving attempt to reduce the Medicare rebate for cataract surgery.
The government should balance the budget by eliminating their own wasteful spending rather than robbing older Australians of dignity in retirement—for which they have already paid. Using the intergenerational issue to argue for a massive increase in population is a fallacy. It is not axiomatic that a massively increased population will result in a higher standard of living or higher productivity—indeed, it is likely to bring greater budgetary pressures to bear. To date, the government has demonstratively failed to deliver on its promise to improve hospital services, telecommunications, roads, water and the environment. Before we add roughly another 15 million people to our population the government must deliver a comprehensible and believable policy on infrastructure development and carry through with it.
If we are serious about increasing productivity, much more could be done to manage the more fantastical claims of the unions for wage hikes that bear no correlation to increased productivity and have only resulted in increased strike action. Failure to manage wage increases and strike action is the real threat to productivity, not older Australians. If, though, the government genuinely wants to give older Australians the option of contributing to increased productivity by retiring later, then rather than token measures, the government needs to provide attractive tax and superannuation measures to retirees to work beyond retirement age.
Last year the government introduced legislation and breached yet another of their election promises, cutting the superannuation co-contribution scheme. Any contributions to superannuation over $50,000 are now punitively taxed. As Piers Akerman noted in the Daily Telegraph yesterday:
… nearly two million Australians will wake to find that they have been caught out by this broken promise and hundreds of thousands of others will discover that their retirement and superannuation plans have been destroyed …
This is not the work of a government trying to encourage self-reliance in retirement; this is false economy. Much more needs to be done to encourage superannuation savings now if the budget is going to balance in 2050.
Much more needs to be done about age discrimination in the workplace. Although there are legislative instruments to prevent ageism, there needs to be a deeper attitudinal shift. It is unfortunate that the government’s recent rhetoric does little to promote this. Their discourse has been one in which older Australians are viewed as a burden on the economy. We need to protect and promote flexible employment, not reintroduce a rigid system which curtails it. For many older people, the choice between continuing to work full time or retiring is not one they always want to make, nor should they have to. Many would like to continue in the paid workforce, albeit on a less demanding basis. If flexible workplaces were enabled, the wealth of knowledge, experience and the wisdom of older workers could continue to be utilised to increase productivity.
There are more than financial benefits that will come from removing the barriers to a more flexible workplace for seniors. Studies show that encouraging older people to remain in the workforce has both physical and mental health benefits. Working beyond retirement is not for everyone, but it is too simplistic to assume that when a person retires they will no longer contribute to the productivity of the nation. Although this contribution may not be directly quantifiable in terms of our GDP, the volunteering and caring role that many older Australians undertake on retiring is vital to Australia’s productivity. This contribution needs to be better understood and recognised. In the interests of a balanced argument the government must initiate a new Productivity Commission report into the value that is added by older Australians. Many retirees will spend their time caring for grandchildren or partners, a caring role that would otherwise tie up already stretched resources.
In our deliberations on the challenges of a changing demographic, let us reflect on the disingenuousness of the government in portraying seniors as a drag on the economy and set the record right. Older Australians are our nation builders and defenders. They have contributed tax for several decades and their ongoing voluntary contributions to the nation can never be measured solely in economic terms. On this side of the House we will continue to defend, with great muscularity, their right to respect, their right to dignity and their right to be valued beyond mere economic units.