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3.II.(a)(i)  

Dr Alan Tapper, Edith Cowan University, Perth article, "The Intergenerational Report is not about intergenerational equity, but about fiscal sustainability" of 15 June 2002 commented on Federal Budget Paper No. 5, known as the Intergenerational Report which he contends is not about "intergenerational equity", as Govt's focus is on "fiscal sustainability" ie. long-term balancing of the budget.

Sustainability and fairness are threatened by a projected trend in Commonwealth spending from 2017 circa where spending will outgrow revenue income with projected fiscal deficits to run at -

*        2 per cent of GDP in 2025; and

*        4 per cent of GDP in 2035.

Increased fiscal spending will be mainly on health and aged care and on age pensions due to those going into retirement around 2020, namely Baby Boomers (born between 1945 and 1965).

These increasing costs will, by necessity, be borne by their successors - born after 1965 known as Generation X.

Dr Alan Tapper is critical that the Intergenerational Report’s report places no heed on the intergenerational equity problem of making the Baby Boomers bear their fair share of those costs (health, aged care and age pensions).

Today, "the aged to working-age ratio (the proportion of people aged over 65 to people of traditional labour force age, 15 to 64) is 19 per cent. This is projected to rise to almost 41 per cent by 2042."

Dr Alan Tapper notes that "Australia has always favoured a lean and mean approach to the welfare state. This frugality has minimised the risk of intergenerational catastrophe.  Australia’s fiscal problem to meet health, aged care and age pensions are serious. Those of the larger, especially the European, welfare states are catastrophic."