Cameron Thompson (Blair, Liberal Party) Share this | Link to this | Hansard source

My question is to the Treasurer. What has been the government’s response to Australia’s biggest economic problem, the ageing of the population? Are there any threats to long-term strategies to deal with the ageing issue?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Blair for his question. I can tell him that in 2002 the government released its Intergenerational report, which found that over the next 40 years the greatest economic problem to face the Australian nation will be the ageing of the population. The percentage of people aged over 65 will increase from 12.7 per cent of the population to 25 per cent of the population in 2042. So we will have more people of retirement age and fewer people of working age. At the time that this is going on, we will have a huge draw-down on medical expenses and pharmaceutical expenses and age pension expenses—when the proportion of the population which is of working age, and therefore of prime taxpaying age, is declining.

The government has laid out a series of measures to deal with this problem. Australia is not alone in facing this problem. Every industrialised Western country is facing this problem to lesser or greater degrees. But Australia has been at the forefront of dealing with this problem—first of all, by paying off all Labor debt so that future generations will not have to service the $96 billion of debt which the Labor Party ran up before 1996 and, secondly, with the establishment of the Future Fund, for the first time to provision for superannuation liabilities which are going to hit over the next 20 years. In 2020, those liabilities will be $140 billion. So you will have a $140 billion liability at the same time as health is blowing out, pharmaceuticals are blowing out, the age pension is blowing out and the proportion of prime taxpayers is declining.

We can handle this problem with the establishment of the Future Fund, as long as it preserves its capital and all earnings inside the fund. But, to the extent that you take out that capital or take out those earnings, you will be robbing the future, right at the time when the great crunch comes—the great generational crunch that we are all facing up to.

Yesterday the Leader of the Opposition, in what must be the most economically irresponsible and short-sighted decision, announced that he would be robbing the Future Fund to pay for Labor election policies. He will be taking $2.7 billion out of that fund, money he never had the wit to set aside, to pay for Labor election policies. As I said yesterday, the first burglary is the hard one: once you have done the first burglary, the second and the third and the fourth get much easier.

In a press conference yesterday, the member for Melbourne was asked whether or not there might be future raids on the Future Fund. He was asked this question—and we had better put it on the record:

JOURNALIST: Mr Tanner, how often do you envisage raiding the Future Fund to pay for election promises?

TANNER: This is a specific commitment …

JOURNALIST: So this might not be a one off?

TANNER: I can’t comment on other specific propositions, they’re still obviously in consideration on a whole range of policy areas …

One burglary down and another in contemplation! Where the member for Melbourne goes, you can bet your bottom dollar other ferrets on the Labor front bench will be following. We then had the member for Perth coming into parliament today, and he was asked this question:

JOURNALIST: Would it be reasonable to use the Future Fund for projects like road funding or major rail projects?

SMITH: Well, you do need to speak on that detail to Lindsay rather than me.

JOURNALIST: He won’t answer that.

SMITH: Well, it’s not a matter for me. I am the education spokesman.

Then AAP reports the member for Lilley, not to be outdone, under ‘Labor will use Future Fund for infrastructure projects’. It says:

Today, Mr Swan said Labor planned to use the fund for various other “productive projects”.

When reporters asked what that meant, Mr Swan replied:

“Basically hard infrastructure, but we’ve not made announcements in  that area yet.”

So this is not a one-off; this is the first in a series of raids: the member for Melbourne is getting ready for it, the member for Perth is lining up and the member for Lilley has announced it. Every raid on that Future Fund steals from future Australian generations. The coalition is the party that has the long-term vision to face up to Australia’s greatest economic challenges. The Labor Party, like bears to a honeypot, have got their paws into this and once they develop a taste for that honey there will be no going back.