Steven Ciobo (Moncrieff, Liberal Party) Share this | Hansard source

I am pleased to rise to speak in the debate on the Aged Care (Living Longer Living Better) Bill 2013 and cognate bills and to follow those speakers who have been speaking before me. I think it is important in the context of a debate about aged care to get an appreciation of what is happening to the demographics of Australian society. We know and we hear frequently that Australia is an ageing nation, like many other Western democracies. We have seen our birth rate decline, so much so that in fact we are now below replacement level with respect to our population. The reason that Australia continues to see an overall net increase in population is migration.

The fundamental point that we have with respect to this cognate debate is what is taking place across Australian society. We know that our population is ageing. The ageing of our population is in every respect the biggest social issue that faces Australia. Australians are generally living longer and as a consequence we have a rapidly ageing population. To put some context around it, about nine per cent of our population is aged 70 years or older. That is anticipated to rise to 13 per cent by 2021 and to reach 20 per cent by 2051. That will be just shy of six million Australians aged 70 and over.

The consequences of the proportion those aged 70 and over increasing from nine per cent of our population to 20 per cent are profound. It is appropriate that today of all days—budget day—we consider what the ramifications of an ageing population actually are. The ramifications are significant and varied. In many respects it was the recognition of the ageing of Australia's population that gave rise to an important major public policy change to take place: the introduction of the GST. That reform was a coalition reform that we undertook because we knew it to be in Australia's long-term interest. It was opposed by the Labor Party, despite the fact that only years earlier the Labor Party had championed the cause for a broad based consumption tax, on the basis of political opportunism while the coalition took the hard decision to introduce a new tax. It was a tax that we knew would not be popular. It was a reform that we undertook not because we knew it was going to win us votes on the street but because we knew it to be necessary for Australia's long-term interest. It stands in remarkable contrast, frankly, to the way that Labor has gone about introducing the carbon tax. Unlike the coalition, who said, 'We will introduce a GST if you elect us,' the Labor Party said, 'We will not introduce a carbon tax', and they did the exact opposite. In fact, who can forget the Prime Minister saying, only six days out from the last election, 'There will be no carbon tax under a government I lead'? Lo and behold, we discovered only weeks later that, in fact, she was going to impose not only a carbon tax but the biggest carbon tax in the world. That is the difference between the approach of the coalition historically and the approach of the government.

With an ageing population the question is: how do we from a public policy perspective deal with the challenges we will face? For example, one of the consequences of an ageing population is that there will be an increasing dependency ratio. Whereas in 2007 approximately six people of working age for every person aged over 67 was the dependency ratio, by 2047 that ratio will be down to 3.2 people of working age for every person aged 67 and over. What does that mean? What does a decrease from six people for every person aged over 67 to 3.2 people for every person aged over 67 mean in terms of the fiscal consequences for all Australians? The fundamental inescapable truth is that it is basically bad news. It is good that Australians are living longer; it is good that Australians are ageing, but the fiscal challenges it presents are profound. Whereas the Australian government can now rely on approximately six working Australians for every one person aged 67 or over, by the late 2040s there will only be three working Australians for every person aged over 67.

The reason that it is a significant problem from a fiscal perspective is that those aged 67 and older, not always but generally, have a heavier reliance on the public purse. Whether it be in healthcare costs, in the pension or in other forms of support and concessions they would like to have available to them, the fact is that Australians that live beyond the age of 67 typically take the view—and in many respects they are entitled to take this view—that: 'I've worked my entire life, I've paid my taxes, I've made my contribution to Australian society, and I expect henceforth to reap some of the dividends of a lifetime of earning income.' The fiscal problem with someone aged over 67 is that with a greater reliance on the public purse comes an increased need for it to be funded. As the proportion of people aged 67 and over goes from nine per cent of the population to 20 per cent of the population—more and more people being a bigger drain on the public purse with fewer and fewer people to pay for it—it represents a challenge that somehow must be funded.

Those that are not particularly charitable might take the view that it is a problem that only this side of the House concerns itself with. Those less charitable might say that only the coalition is genuinely concerned about how we fund future challenges. We know, based on the form of this government, that the Labor Party do not particularly care about how we fund future challenges. That is the reason why the Labor Party will stand up and make announcements such as during this Living Longer Living Better cognate debate and package of bills. That is why they will put forward reforms such as Gonski or the NDIS without the appropriate safeguards to make sure there is funding in place to provide the necessary future funding required to meet those liabilities. That is important because any government that signs up the Australian population to future liabilities—be it Gonski, be it NDIS, be it aged-care reform—needs to make sure it is not putting on future generations of Australians a tax burden so significant that they are no longer able or willing to fund it.

In the debate around aged care, this is the consequence. When you shift from six taxpayers funding every person aged 67 and over down to just over three taxpayers funding every person aged 67 and over, it means that the tax burden on those people is significant. When you view that in the context of the current debate that will be taking place in this chamber tonight, we know that there are some serious challenges ahead. That is part of the reason why the coalition introduced the GST, but more importantly it is the reason the coalition was so committed to paying down debt. It is the recognition of the fact that Australia's population is ageing that drove the coalition to pay off the $96 billion of debt the Labor left when they were last in office. It was at the core of the coalition's economic approach: to pay down debt and to put our economy and our country on a strong, stable footing, knowing full well that in future decades there will be very significant drawdowns on the public purse. Those drawdowns must be met by taxation across the population. That is why we paid down debt.

The problem that we have now is that as we shift over the coming decades to having only three people paying all the liabilities expected by a person aged 67 and over—with only three people shouldering the tax burden to support the generous pensions and generous healthcare entitlements and concessions that that person is expecting—it makes it very expensive. And not only will meeting the recurrent liabilities that exist be expensive; this government has racked up $172 billion worth of deficits in the last five years. Australia's net debt currently sits at around $140 billion. We know that it is going to get a hell of a lot worse tonight.

We saw two weeks ago Labor saying—despite on over 400 occasions promising that this year's budget would be in surplus—that this year's budget will in fact be yet another deficit. On 400 occasions, Labor said, 'We will deliver a budget surplus.' The member for Oxley, who is at the table, circulated a newsletter to his electorate that said, 'We delivered a budget surplus.' But what do we actually know? Two weeks ago they said, 'No, cancel that. There's not going to be a budget surplus. It was going to be $1 billion of surplus but now it is going to be a $7.5 billion deficit.' That was two weeks ago. One week ago, they changed it. They said: 'Scratch that. It's not going to be a $7 billion deficit; it's actually going to be a $12 billion deficit.' That was one week ago. Then a matter of about 72 hours ago—

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