Intergenerational Report: Older Australians and women need to be encouraged to work more
Australia’s prosperity is at risk of being put under increasing pressure over the next four decades unless Australians work longer and productivity is improved, according to a major report due to be released today.
The ABC understands the Intergenerational Report, looking at population and budget projections to 2055, also states that economic reform is “crucial” to improve living standards. The document will be released by Federal Treasurer Joe Hockey today. Like previous long-term forecasts, the report will predict that the proportion of working Australians will decline as the nation’s population ages. By 2054-2055, the workforce participation rate is expected to be 2.2 per cent lower than today at 62.4 per cent. While the report will state “it is fantastic Australians are living longer, healthier lives” it warns there is a risk to GDP and income growth unless the Government can grapple with these demographic changes. It will suggest those not in the workforce, in particular older Australians and women, need to be encouraged to get a employment, re-enter the workforce, or prolong their careers.
To do that, the report will advocate policies to improve the accessibility of childcare, more flexible working conditions and the removal of discrimination. Australia currently trails Canada and New Zealand in terms of total workplace participation, though gains have been made in recent decades. For example, the report will show the number of working Australians aged 55 to 64 increased by roughly 18 per cent between 1978-1979 and 2013-2014. Also, the number of women in work has increased by 20 per cent since 1974-1975.
The Government is likely to use the Intergenerational Report to make the case for politically difficult policy changes in the next budget. The document will say reforms “to improve productivity will be crucial to achieve the growth in living standards” and wages. It will show average income levels have risen from about $40,500 in the early 1990s to about $66,400 today. “For every hour that is worked, Australians today produce twice as many goods and services per hour of work than they did in the early 1970s … It is no coincidence average incomes have almost doubled,” the report is expected to say. Assistant Treasurer Josh Frydenberg said the “landmark report” was a vital addition to complex national policy debates. “The detail it describes … will help the public understand the context for the Government’s economic decision making over the years ahead,” Mr Frydenberg said.
Labor and Greens wary of politicisation
The Intergenerational Report will also point out that the Government needs to ensure spending is sustainable. It will contain three forecasts of the nation’s cash deficit in 2054-2055. Under the policies of the Labor Government, the report suggests the cash deficit would be 12 per cent of GDP. But under the policies the Abbott Government has managed to pass so far, it forecasts a deficit of half that, or roughly $266.7 billion in today’s dollars.
This should be an independent report and I am worried it will be used to justify savage cuts in the budget.Greens Senator Richard Di Natale
Also, under the policies the Abbott Government has proposed but not passed, it forecasts a surplus from 2019-2020. The Opposition says it is wary the Government is manipulating the report to try to justify its “unfair budget”. “This Treasurer has manipulated the timing of the release, he’s manipulating the content,” Shadow Treasurer Chris Bowen said. “We know that he hasn’t accepted the Department of Immigration’s advice about what the population figures in the report should be and he’s now bringing down a chapter on the Labor Party, it appears.” The Greens plan to refer the report to a Senate committee, to scrutinise its underlying assumptions and forecasts. “So far the discussion we are hearing around the Intergenerational Report seems to indicate we’ve arrived at a conclusion before we’ve even looked at the issue in detail,” Greens Senator Richard Di Natale said. “This should be an independent report and I am worried it will be used to justify savage cuts in the budget,” he said. Source: abc.net.au
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