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economics@
Financial Implications of an Ageing Population
Financial Implications of an Financial Implications of an Ageing PopulationAgeing Population
Presentation to Aged & Community Care Victoria’s
State Congress and Trade Exhibition
Presentation to Presentation to Aged & Community Care VictoriaAged & Community Care Victoria’’ss
State Congress and Trade ExhibitionState Congress and Trade Exhibition
Flemington RacecourseFlemington RacecourseMelbourneMelbourne
2525thth May 2007May 2007
Saul EslakeSaul EslakeChief EconomistChief EconomistANZANZ
www.anz.com/go/economicswww.anz.com/go/economics
economics@
Part I: Demographic projections
Part I: Part I: Demographic projectionsDemographic projections
economics@3
Australians are living longer …Australians are living longer Australians are living longer ……
Life expectancy at birth
40
45
50
55
60
65
70
75
80
85
90
1900 1910 1922 1934 1946 1955 1967 1976 1987 1997 2007 2017 2027 2037 2047
Years
Females
Males
IGR2projections
Source: ABS, Historical Population Statistics (3105.0) Table 48;Australian Government, Intergenerational Report 2007 Table 2.1
economics@4
… and having fewer children …… and having fewer children and having fewer children
Total fertility rate*
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
1925 1935 1945 1955 1965 1975 1985 1995 2005 2047
Years
IGRprojec-tions
IGR2
IGR1
Sources: ABS, Historical Population Statistics (3105.0) Table 39;Australian Government, Intergenerational Report 2007 Chart 2.2
* The number of children a woman will have during her lifetime if she experienced current age-specific fertility rates at each age of her reproductive life
economics@5
Age distribution of the Australian population
As a result, Australia’s population profile will change dramatically over the next fifty yearsAs a result, AustraliaAs a result, Australia’’s population profile will s population profile will change dramatically over the next fifty yearschange dramatically over the next fifty years
2005
0
10
20
30
40
50
60
70
80
90
100+
FemaleMale
% of population
Age
12 0 1 2
2050
0
10
20
30
40
50
60
70
80
90
100+FemaleMale
% of population
Age
12 0 1 2
Sources: ABS, Population Projections Australia (3220.0) (Series B) and Economics@ANZ calculations
economics@6
Market outlook for coffins and prams
These demographic changes will have a profound impact on the pattern of economic activityThese demographic changes will have a profound These demographic changes will have a profound impact on the pattern of economic activityimpact on the pattern of economic activity
0
2
4
6
8
10
12
14
2001-02 2050-51
Up 50%
Down 30%
Birth
s an
d d
eath
s per
1000 p
eople
Note: Assumes that demand is proportional to births and deaths.Source: Gary Banks, ‘An Ageing Australia – Small Beer or Big Bucks’, Adelaide, 29 April 2004.
economics@7
Today there are 5 people of working age for every one over 64; in 2050 there will be only 2.3 Today there are 5 people of working age for Today there are 5 people of working age for every one over 64; in 2050 there will be only 2.3 every one over 64; in 2050 there will be only 2.3
‘Dependency ratios’
0
10
20
30
40
50
60
1925 1950 1975 2000 2025 20500
2
4
6
8
10
12% of populationaged 15-64
Children (0-14)
Aged (65+)
'Very aged' (85+)(right hand scale)
% of populationaged 15-64
Sources: ABS, Historical Population Statistics (3105.0) Table 19;and Population Projections (3222.0) Table B19; Economics@ANZ.
economics@8
Population ageing will be faster in SA and Tasmania than in other StatesPopulation ageing will be faster in SA and Population ageing will be faster in SA and Tasmania than in other StatesTasmania than in other States
Aged (65+)dependency ratios
0
10
20
30
40
50
60
70
NSW Vic Qld SA WA Tas NT ACT
2050-51 2005-06
Very old (85+)dependency ratios
0
2
4
6
8
10
12
14
16
NSW Vic Qld SA WA Tas NT ACT
2050-51 2005-06
Sources: ABS, Population Projections, Australia (3222.0), Series BTables B1-B8; Economics@ANZ.
economics@9
Population ageing will be more gradual in Australia than Japan or Europe Population ageing will be more gradual in Population ageing will be more gradual in Australia than Japan or Europe Australia than Japan or Europe
‘Dependency ratios’
0
10
20
30
40
50
60
70
80
1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050
Population 65 & overas a % of populationaged 15-64
US
Japan
WesternEurope
China
Australia
Sources: United Nations Department of Economic and Social Affairs,World Population Prospects: The 2006 Revision (medium variant).
economics@
Part II: Demography and the economy
Part II: Part II: Demography and the economyDemography and the economy
economics@11
Ageing and economic growth – the 3 P’s of population, participation and productivityAgeing and economic growth Ageing and economic growth –– the 3 Pthe 3 P’’s of s of population, participation and productivitypopulation, participation and productivity
PopulationGDP =
x Labour force
PopulationLabour force
participation rate
1 –unemployment
rate
x Employment
Labour force
x Hours worked
Employment
Productivityx GDP per hour
Hours worked
economics@12
0
2
4
6
8
10
12
2001 2006 2011 2016 2021 2026 2031 2036 2041
%
Migrant agedistribution
Migrant numbers
Fertility
Mortality
Source: Australian Government, Intergenerational Report 2007Chart 2.23.
Australia’s population now expected to reach 27.8mn by 2042, as against 25.3mn previouslyAustraliaAustralia’’s population now expected to reach s population now expected to reach 27.8mn by 2042, as against 25.3mn previously27.8mn by 2042, as against 25.3mn previously
Sources of upward revisions to the projections of population growth between IGR1 (2002) and IGR2 (2007)
economics@13
Labour force participation typically declines sharply with ageLabour force participation typically declines Labour force participation typically declines sharply with agesharply with age
Labour force participation rates by age, 2005-06
0
10
20
30
40
50
60
70
80
90
100
15-19 20-24 25-34 35-44 45-54 55-59 60-64 65 &over
% of population
Men
Women
Age range
Source: ABS, Labour Force Australia – Detailed (6291.0.55.001), Table 01.
economics@14
Participation rates of Australians aged 55-64 is lower than in comparable overseas countriesParticipation rates of Australians aged 55Participation rates of Australians aged 55--64 is 64 is lower than in comparable overseas countrieslower than in comparable overseas countries
Labour force participation rates of persons aged 55-64
0
10
20
30
40
50
60
70
80
90
Icela
nd
Irela
nd
Sw
eden
NZ
Norw
ay
Sw
itzerla
nd
Japan
US
Kore
a
Denm
ark
UK
Canada
Finla
nd
Austra
liaPortu
gal
Mexico
Germ
any
Cze
ch R
ep
Neth
erla
nds
Spain
France
Gre
ece
Slo
vakia
Hungary
Belg
ium
Austria
Pola
nd
Italy
Luxem
bourg
Turk
ey
%
OECD average
Source: OECD Employment Outlook (2006) Annex Table C.
economics@15
Average hours worked also typically declines after the age of 60Average hours worked also typically declines Average hours worked also typically declines after the age of 60after the age of 60
Average hours worked by age, 2005-06
0
5
10
15
20
25
30
35
40
15-19 20-24 25-34 35-44 45-54 55-59 60-64 65 & over
Hours per week
Age range
Source: ABS, Labour Force Australia – Detailed (6291.0.55.001), DataCube EM2; Economics@ANZ.
economics@16
In the absence of any change, labour force participation will drop 7 pc points by the 2040sIn the absence of any change, labour force In the absence of any change, labour force participation will drop 7 pc points by the 2040sparticipation will drop 7 pc points by the 2040s
Aggregate labour force participation rate, 2002-03 to 2050-01
Par
tici
pat
ion r
ate
(%)
2004 2009 2014 2019 2024 2029 2034 2039 2044
56
58
60
62
64
66
Participation rate with ageing
Participation rate without ageing
Ageing effect
Par
tici
pat
ion r
ate
(%)
2004 2009 2014 2019 2024 2029 2034 2039 2044
56
58
60
62
64
66
Participation rate with ageing
Participation rate without ageing
Ageing effect
Source: Productivity Commission, Economic Implications of anAgeing Australia, March 2005.
economics@17
… which would in turn result in a significant slowdown in economic growth…… which would in turn result in a significant which would in turn result in a significant slowdown in economic growthslowdown in economic growth
%
%
with ageing
2004 2011 2018 2025 2032 2039 20461.2
1.6
2.0
2.4
GDP per capita growth
with ageing
without ageing
with ageing
without ageing
2004 2011 2018 2025 2032 2039 204614.4
14.8
15.2
15.6
16.0
16.4
Effective labour supply
Hours
per
capita p
er w
eek
with ageing
without ageing
Source: Gary Banks, ‘An Ageing Australia – Small Beer or Big Bucks’, Adelaide, 29 April 2004.
economics@18
There has been a noticeable rise in labour force participation among older age groups recentlyThere has been a noticeable rise in labour force There has been a noticeable rise in labour force participation among older age groups recentlyparticipation among older age groups recently
Labour force participation rates by age
55-59 year olds 60-64 year olds
70
72
74
76
78
80
82
81 86 91 96 01 0625
30
35
40
45
50
55
60
65%
Men (left scale)
Women(right scale)
%
40
42
44
46
48
50
52
54
56
58
81 86 91 96 01 0610
15
20
25
30
35%
Men(left scale)
Women(right scale)
%
Source: ABS, Labour Force Australia – Detailed (6291.0.55.001), Table 01. Data shown as 12-mth moving averages.
economics@19
Raising productivity growth is the ‘best’ answer to offsetting the economic impact of ageingRaising productivity growth is the Raising productivity growth is the ‘‘bestbest’’ answer answer to offsetting the economic impact of ageingto offsetting the economic impact of ageing
Implications of alternative productivity growth assumptions
2.05% pa after 2003-04
1.75% pa after 2003-04
1.45% pa after 2003-04
Average growth in GDP per capita % % %
1990s 2.14 2.14 2.142000s 2.13 1.95 1.772010s 1.76 1.46 1.162020s 1.57 1.27 0.982030s 1.80 1.50 1.202040s 1.91 1.61 1.31Real GDP per capita in 2044-45 ($) 82 036 72 708 64 417Increase over real GDP per capita in 2003-04 ($) 42 712 33 384 25 093Additional real GDP 2004-05 to 2044-45 ($ billion) relative to baseline 4 185 0 -3 847Additional GDP 2004-05 to 2044-45 per mean population relative to baseline ($) 170 755 0 -156 949
Productivity growth of -
Source: Productivity Commission, Economic Implications of anAgeing Australia, March 2005.
economics@20
After improving significantly in the 1990s productivity growth has slowed this decadeAfter improving significantly in the 1990s After improving significantly in the 1990s productivity growth has slowed this decadeproductivity growth has slowed this decade
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
82 86 90 94 98 02 06
Average annual rateof change over rolling4-year periods (%)
Australia
UnitedStates
Labour productivity growth
Note: labour productivity is output per hour worked in the non-farm business or ‘market’ sector. Sources: ABS; US Bureau of Economic Analysis; University of Groningen Growth and Development Centre Total Economy Database January 2007.
78
80
82
84
86
88
90
82 85 88 91 94 97 00 03 06
%
Australia GDP perhour worked as apercentage of US
Labour productivity level
economics@21
Implied projections of productivity growth in the past two Budgets
Official assumptions about productivity growth have been revised down over the past yearOfficial assumptions about productivity growth Official assumptions about productivity growth have been revised down over the past yearhave been revised down over the past year
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
Employment Implied productivity
%
Financial years
na na
2006-07 Budget 2007-08 Budget
Implied productivity growth projections derived as the difference between projected real GDP and employment growth. Sources: Table 2, Statement No. 1 in Budget Paper No. 1, 2006-07 and 2007-08; Parliamentary Library Budget Review 2007-08, Table 4.
economics@22
The ‘3Ps’ of growth in real GDP per personThe The ‘‘3Ps3Ps’’ of growth in real GDP per personof growth in real GDP per person
Contributions of population, participation and productivity to growth in real GDP per person
0.4 0.3
-0.1-0.3
1.82.1
0.1
-0.3
0.0 0.0
1.81.6
-1
0
1
2
3
4
Share ofpopulationaged 15+
Participationrate
Unemp-loyment rate
Average hoursworked
Labourproductivity
Real GDP perperson
Past 40 years Next 40 years
Percentage contribution
Population Participation Productivity
Source: Australian Government, Intergenerational Report 2007Chart 2.18
economics@
Part III: The financial consequences of
demographic change
Part III: Part III: The financial consequences of The financial consequences of
demographic changedemographic change
economics@24
Health spending rises exponentially as people get older …Health spending rises exponentially as people Health spending rises exponentially as people get older get older ……
Health spending per person, by age group, 2005-06
0
2
4
6
8
10
12
14
16
18
0-4 5-14 15-24 25-34 35-44 45-54 55-64 65-74 75-84 85+
Hospitals Medical benefits Pharmaceutical benefits Private health insurance
Average of all people = 1.00
Source: Australian Government, Intergenerational Report 2007,Table C2.
economics@25
… but population ageing isn’t the only, or even the biggest driver of increasing health care costs…… but population ageing isnbut population ageing isn’’t the only, or even t the only, or even the biggest driver of increasing health care coststhe biggest driver of increasing health care costs
Main drivers of increases in Commonwealth Government health spending
0
1
2
3
4
5
6
1985-86 to 2005-06 1995-96 to 2005-06
Other* Age structure Population
Real % per annum
Source: Australian Government, Intergenerational Report 2007,Table 3.1.
* includes factors such as greater use of diagnostic procedures, listing of new medications on the PBS, and price or cost increases above the general rate of inflation.
economics@26
It seems unquestioned that hospital, medical and drugs prices will keep rising in real termsIt seems unquestioned that hospital, medical It seems unquestioned that hospital, medical and drugs prices will keep rising in real termsand drugs prices will keep rising in real terms
Consumer prices
0
1
2
3
4
5
6
7
Hospital &medicalservices
Pharma-ceuticals
All GroupsCPI
% pa
* Pharmaceuticals shown at June quarters only because of pronounced seasonal fluctuations arising from the operation of PBS ‘safety net’; 2007 is an estimate.Source: ABS Consumer Price Index (6401.0) Table 7.
90
100
110
120
130
140
150
01 02 03 04 05 06 07
Dec 2000= 100
Hospital andmedical services
Pharma-ceuticals*
CPI
Annual increase in consumer prices since Dec qtr 2000
economics@27
Rising health care costs with age is a universal phenomenonRising health care costs with age is a universal Rising health care costs with age is a universal phenomenonphenomenon
Indexes of health care costs per capita by age
Health expenditure on 65–69 year olds
Health expenditure on 85–89 year olds
Health expenditure –on 25 29 year olds
Australia 100 387.6 614.2Belgium 100 274.5 530.9
Canada 100 351.5 ..Denmark 100 241.9 372.3Germany 100 303.7 479.7Spain 100 312.5 455.8France 100 221.4 479.8Italy 100 289.3 417.7Netherlands 100 264.0 383.6Austria 100 360.7 579.3Finland 100 326.4 580.0Sweden 100 276.3 423.7
United States 100 314.9 545.6
Sources: OECD, A Disease-Based Comparison of Health Systems (2003); Health Canada (2001); E. Meara et al, ‘Trends in Medical Spending by Age’, Health Affairs July-August 2004.
economics@28
Hospital services andhealth care agreements
The Commonwealth has curbed growth in its hospital costs, but not in the PBS The Commonwealth has curbed growth in its The Commonwealth has curbed growth in its hospital costs, but not in the PBS hospital costs, but not in the PBS
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
01 02 03 04 05 06 07 08 09 10 11
$ bn
Actual
2002-03forward
estimates
2007-08forward estimates
Pharmaceutical servicesand benefits
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
01 02 03 04 05 06 07 08 09 10 11
$ bn
Actual
2002-03forwardestimates
2007-08forward estimates
Actual and forward estimates of selected areas ofCommonwealth Government health expenditures
Source: Statement 6, Budget Paper No. 1, Budget Strategy and Outlook, 2002-03 and 2007-08.
economics@29
Government health spendingas a p.c. of GDP
Health care costs will rise substantially as a percentage of GDPHealth care costs will rise substantially as a Health care costs will rise substantially as a percentage of GDPpercentage of GDP
0
1
2
3
4
5
6
7
8
Hos-pital
Medi-care
PBS Other Total
2046-47 2006-07
%
Source: Australian Government, Intergenerational Report 2007, Table A1.
Commonwealth hospital expenditure will rise from 1.2% to 2.3% of GDP by 2046-47
Medicare expenditures will rise rather less steeply, from 1.1% to 1.3% of GDP
Spending on the pharmaceutical benefits scheme will rise more than threefold, from 0.7% to 2.5% of GDP
– increases in drug prices ahead of general inflation an important additional factor
Total Commonwealth spending by governments will rise from 3.8% to 7.3% of GDP
Total Commonwealth age-related spending will increase from 7.1% to 13.7% of GDP
economics@30
Age-related Commonwealth spending will jump from 7% to nearly 14% of GDP by 2046-47AgeAge--related Commonwealth spending will jump related Commonwealth spending will jump from 7% to nearly 14% of GDP by 2046from 7% to nearly 14% of GDP by 2046--4747
Age and youth-related Commonwealth government spending
0
2
4
6
8
10
12
14
16
18
2006-07 2011-12 2016-17 2026-27 2036-36 2041-42 2046-47
Health Aged care Age pensions 'Youth-related'*
% of GDP
* Education spending plus family, child care, maternity, and parenting benefits or payments and youth allowance and Austudy.Source: Australian Government, Intergenerational Report 2007, Table A1.
economics@31Source: Intergenerational Report 2007, Chart 3.22.
Ageing of the population will push the budget into deficit – but not by as much as first thoughtAgeing of the population will push the budget Ageing of the population will push the budget into deficit into deficit –– but not by as much as first thoughtbut not by as much as first thought
-5
-4
-3
-2
-1
0
1
2
2006-07 2016-17 2026-27 2036-37 2046-47
% of GDP
IGR1 (2002) IGR2 (2007)
Commonwealth Government ‘primary balance’*
* ‘Primary balance’ means excluding net interest payments and Future Fund earnings.
5% of GDP3½% of
GDP
economics@32
Less dire fiscal projections reflect slower health spending and larger economyLess dire fiscal projections reflect slower health Less dire fiscal projections reflect slower health spending and larger economyspending and larger economy
Projected growth in real health care spending per person has been revised down (from 3.6% pa to 3.3% pa) since IGR1
– partly reflecting policy changes to PBS (eg generic drugs)– partly due to more refined modelling methodologies– over 35 years amounts to $535 dollars per head (2006-07$)
More importantly, the level of nominal GDP is expected to be more than 16% higher by 2041-42 than projected in IGR1
– largely due to the population now being expected to be 10% larger than forecast in IGR1
– with most of the remainder attributable to the greater-than-expected improvement in Australia’s terms of trade (export prices relative to import prices) since IGR1, which lifts the GDP deflator by 5 pc pts compared with the IGR1 forecast
– real GDP per person in 2041-42 is expected to be only 1% higher than forecast – entirely attributable to an increase in hours worked per person (with higher labour force participation offset by other demographic factors)
Higher nominal GDP boosts the revenue projections– since revenue is assumed to be a constant % of GDP
economics@33
Most of the additional costs will be borne by the Federal Government, but State costs will rise tooMost of the additional costs will be borne by the Most of the additional costs will be borne by the Federal Government, but State costs will rise tooFederal Government, but State costs will rise too
Health expenditure as a share of GDP
Australian Government hospital 1.40 1.58 1.79 2.03 2.25Medicare 1.23 1.40 1.56 1.69 1.80PBS 0.68 1.29 1.91 2.34 2.59Australian Government other 0.60 0.67 0.73 0.80 0.86
Australian Government total 3.90 4.94 6.00 6.85 7.50
State hospital 1.19 1.35 1.54 1.74 1.92State other 0.60 0.67 0.74 0.81 0.88State government total 1.78 2.02 2.29 2.55 2.79
Total government expenditure 5.69 6.96 8.28 9.40 10.28
2002-03 2014-15 2024-25 2034-35 2044-45
Source: Productivity Commission, EconomicImplications of an Ageing Australia, March 2005.
economics@34
Four ‘solutions’ to the fiscal costs of ageing Four Four ‘‘solutionssolutions’’ to the fiscal costs of ageing to the fiscal costs of ageing
Allow the deficit to rise Raising taxes
Cutting services Increasing user charges
Borrowing to fund fiscal costs of ageing would result in public debt of $4.2 trillion (200% of GDP) by 2045
Although if governments were willing to run larger surpluses over the next 20 years, the resulting net financial assets could be drawn down without boosting debt
Feasible, but politically difficult – especially given the rising proportion of seniors among voters (51+ will represent a majority of adults after 2035)
Also likely to be inequitable given that service reductions will probably impact more on lower-income households
Covering the entire fiscal cost of ageing would require a 20% increase in average tax levels …… which would in turn adversely affect incentivesSome increase in taxes is probably inevitable – but better done by broadening the base rather than raising rates
Feasible, but politically difficult given rising political ‘clout’ of seniorsSome scope for greater use of means-testing for access to ‘free’ services …… and for use of bonds, etc., for wealthy aged
economics@35
Seniors typically have low incomes – but lots of assetsSeniors typically have low incomes Seniors typically have low incomes –– but lots of but lots of assetsassets
Mean gross household incomeby age group*, 2003-04
Mean household net worthby age group*, 2003-04
0
100
200
300
400
500
600
700
800
15-24
25-34
35-44
45-54
55-64
65 &over
$ per week
All households
0
200
400
600
800
1,000
1,200
1,400
1,600
15-24
25-34
35-44
45-54
55-64
65 &over
$ per weekAll
house-holds
* Age of ‘reference person’ (household head).Source: ABS, Household Expenditure Survey2003-04 Table 20.
economics@36
Cumulative net impact on the ‘underlying’ cash balance of ‘parameter variations’ and ‘policy decisions’ over past 5 Budgets
Over the past 5 Budgets, ‘parameter variations’total $398 bn and policy decisions $388bn Over the past 5 Budgets, Over the past 5 Budgets, ‘‘parameter variationsparameter variations’’total $398 bn and policy decisions $388bn total $398 bn and policy decisions $388bn
0
10
20
30
40
50
60
70
80
2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11
'Parameter variations' 'Policy decisions'
$bn
Financial years
Cumulative impact of:
Source: Table 4, Statement No. 1 in Budget Paper No. 1 (various years); Economics@ANZ.
economics@37
Personalincome taxcuts
Other
56% of this has been handed over in cash to households56% of this has been handed over in cash to 56% of this has been handed over in cash to householdshouseholds
Sources: As for previous slide. Total is A$398bn over nine years.
Familytax
benefits
Other personal tax cuts(incl. super)
Business tax cuts
Medicare enhancements
Defence & ‘national security’
Education, innovation etc.
RoadsWelfare-to-work
Aged care
Increasedbudget surpluses
economics@38
The projected Budget surpluses are smaller than at the same stage of previous business cyclesThe projected Budget surpluses are smaller than The projected Budget surpluses are smaller than at the same stage of previous business cyclesat the same stage of previous business cycles
Commonwealth ‘underlying’ cash balance
-20
-15
-10
-5
0
5
10
15
20
70 75 80 85 90 95 00 05 10-5
-4
-3
-2
-1
0
1
2
3
4$bn
As a % of GDP(right scale) $ bn
(left scale)
%
Sources: 2007-08 Budget Paper No. 1, Statement 13, Table 1 (and previous issues).
economics@
Part IV: Getting things in perspective
Part IV: Part IV: Getting things in perspectiveGetting things in perspective
economics@40
Ageing and its costs in perspectiveAgeing and its costs in perspectiveAgeing and its costs in perspective
Population ageing is primarily an indication of economic and social success -
– longer life expectancy– conscious decisions by men and women with higher education
and greater choice to have fewer children
Australia’s population will age much less quickly than that of most other Western (and many Asian) countries
– and we are much better placed to absorb the cost of providing retirement incomes than most other Western countries
Population will occur gradually, not suddenly, and there is plenty of time to implement measures designed to deal with the fiscal problems associated with demographic change
Australia will be a richer country in forty years time, with greater capacity to absorb the costs of population ageing
– on reasonable assumptions, average per capita incomes will be significantly higher in 2044-45 than in 2006-07
But it would be preferable if the Commonwealth Government were saving more now, while it can and should
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