Amanda Rishworth (Kingston, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Treasurer. Will the Treasurer outline for the House the implications of an ageing and growing population for Australia’s future economy?

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

I thank the member for Kingston for her question. The challenges laid out in the Australia to 2050 report I released yesterday are very serious but they are certainly not insurmountable. As the Prime Minister said a moment ago, the ageing of our population does have some very big implications for Australia’s future economy and for our society. The Intergenerational report shows that by 2050 the proportion of Australia’s population aged 65 and over will nearly double. Those opposite may want to stick their heads in the sand and ignore this fact. They certainly did not ignore it during the two previous intergenerational reports, but apparently they now deny the reality of this very basic demographic fact. This means by 2050 there will only be 2.7 people of working age for every person aged 65 and over, compared to five people today. Common sense tells you that this will put pressure on economic growth and it will certainly put pressure on living standards. It means that living standards over the next 40 years will likely grow at a slower pace than in the past 40 years. The IGR projects real GDP per person to grow at 1.5 per cent a year over the next 40 years, compared with 1.9 per cent over the previous 40 years, and economic growth to slow from an average of 3.3 per cent over the last 40 years to 2.7 per cent over the next 40 years to 2050.

Faced with these projections governments can make choices, and governments have two choices: we can ignore these future challenges, as the previous government did, or we can take steps now to grow our economy and to lift our growth potential by lifting the productivity of our economy—and that is the approach that we take. We on this side of the House understand the nature of the challenge: we need to ensure we have continuing prosperity with rising living standards, with social cohesiveness and with a sustainable environment. We on this side of the House are committed to doing that and to working hard to do it, and that is why we brought forward this Intergenerational report. As the Prime Minister has already said, it means we have to increase our growth rate of productivity and it means we have to get in there and do the hard work and the hard yards of the reform agenda, and we have been doing that from day one.

The Leader of the Opposition and the shadow Treasurer sat around the cabinet table under the previous government, saw a growing and ageing population and did absolutely nothing. They said: ‘It’s got nothing to do with us. Leave it all to the states.’ They would not be a partner with the states or local government in investing in infrastructure. They would not ‘fess up to the fact that we had a skills problem in this country and that we needed to do much more to educate and skill our workforce. All of those things were swept right under the carpet, but this government is determined to implement a regulatory reform agenda which lifts our productivity. The Minister for Finance and Deregulation is making great strides in that area, as is the Minister for Education. There are the investments in extra training places—711,000 extra vocational education and training places and 50,000 additional university places—and, of course, the $36 billion investment in infrastructure.

All of these things go to the very core of a reform agenda. They go to the very core of a nation-building agenda. They go to the very core of the quality of life in our communities. All of these issues were swept under the carpet by the previous government. We are up to the task of taking on this challenge, but of course those on the opposite side of the House simply want to sweep it all under the carpet and play their political games. We on this side of the House will not sweep the big challenges under the carpet. We are up to the task of meeting the future challenges of this country to sustain our living standards and to protect the quality of our lives. That is what we are dedicated to, but those opposite are so divided and so bereft of any alternative policy they have nothing to do but to play short-term, cheap, populist politics that does not add up to a row of beans—and it certainly does not add up to leadership.