Australians will live longer and be healthier over the next 40 years but they will have to be prepared to work well beyond 65 if they want to maintain their standard of living.
That’s the key message from Treasurer Joe Hockey’s intergenerational report released on Thursday.
Speaking today after the release of the report, Mr Hockey was upbeat, saying we are the “luckiest generation to ever live”, and that the next generation would be “even luckier”.
But he all but ignored the threat of climate change on future generations.
Mr Hockey said the over-65s would be “the grey army that is going to deliver prosperity to Australia.”
He said the “second major army” of workers was women coming back into the workforce, often after having children. He said improvements in areas such as childcare would be necessary to facilitate more female participation.
But productivity, he said, was “by far the most important” factor in handling the ageing population.
“Productivity is the biggest contributor to GDP per person … That’s why labour productivity is hugely important to our future growth.”
He flagged investment in capital and infrastructure as being key to achieving increased productivity.
He said “disruptive technology” was turning the traditional economy on its head.
“We’ve got an opportunity to get much more bang for our buck through innovation.”
He said small business would become the “innovative hub” of the economy.
On the subject of paying for Australia’s future, he said: “A lot comes down to whether you can fund your debt.”
He said last year’s budget tried to do “40 years of work in one year, and it did bite off too much.”
When asked about climate change, he first avoided the question, saying: “If you portray any number as scary, I think you’re on the wrong track. I think we should celebrate we are living longer.”
“My God, our generation is the luckiest to ever live, and we need to make sure our next generation is even luckier.” He said it was exciting that we are living longer, unless we “screw things up”.
When pressed to address climate change, he said: “The thing that is going to be transformative in climate change is technology change.”
Here are some of the key figures in the report:
* In 2054/55 there will be about 40,000 people aged over 100 years in Australia compared with just 122 now.
* The number of people aged over 65 is expected to double.
* The number of people of traditional working age (15-64 years) is expected to fall from 4.5 for every person over 65 to 2.7 people.
* The population will be 39.7 million versus 23.9 million.
* Average economic growth is expected to slow over the next 40 years than the past 40 years – 2.8 per cent vs 3.1 per cent.
* Under current government legislation the budget deficit would 6 per cent of GDP in 2054/55 vs 3.1 per cent ($48.5 billion) in 2013/14.
* Under a “proposed policy scenario” the Abbott government expects to improve the budget bottom line to a sustained surplus from 2019/20.
* Government debt under current legislation would be 60 per cent of GDP, but under “proposed” policies it would be zero by 2031/32.
– with AAP