Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, my question is to the Minister for Finance and the Minister representing the Treasurer, Senator Cormann. Will the minister advise the Senate of the appropriate government policy responses to Australians living healthier and longer lives?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Edwards for that question. There was some very good news in the Intergenerational reportvery good news for all of us, indeed. What the Intergenerational report shows is that all of us can expect to live longer than those who came before us. Of course, that is much better than the alternative, but it does have implications for our economic and fiscal policy settings. What it also shows is that the number of Australians in the traditional working age—the number of Australians aged 15 to 64—is declining in proportion to the number of Australians at the retirement age, 65 and older. In 1970, we had about 7.5 Australians of traditional working age for every Australian 65 and over. Today, there are 4.5 Australians, and that is expected to decline further.

What that means is that there is more and more pressure on taxpayers at a time when the related expenditure for an ageing population in social services, pensions, welfare generally, healthcare services and the like is expected to go up and up. So it is very important for our future, it is very important for our living standards into the future and it is very important for the living standards of older Australians in the future—which all of us will become over time, hopefully—that we get the policy settings right and that we get government spending in relation to those services on a fiscally sustainable foundation. The more older Australians that we have for every working taxpayer, the less revenue we have going around to fund a growing number of services. So we really need to address this by convincing people to work longer and also by making sure that government spending is on a more sustainable foundation for the future across all of these important social and health services areas.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the minister explain to the Senate why participation in the workforce is beneficial for a strong society and a strong economy?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

I thank Senator Edwards for that supplementary question. Workforce participation rates are very important for our economic growth into the future. Falling workforce participation rates mean lower productivity, which means less economic growth. We want to strengthen economic growth, which is why we have to convince more Australians to join the workforce and which is why we have to convince more older Australians to stay in the workforce longer. That is of course why, from opposition, we supported Labor's initiative in government to increase the pension age to 67 by 1 July 2023. And that is why, in government, we propose to extend that same trajectory which Labor started, with our support, to increase the pension age to 70 years of age—not by tomorrow, not by next week but by 1 July 2035—as part of an orderly transition into a future where people can expect to live in excess of 90 years of age.

Sean Edwards (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Will the minister inform the Senate what we need to do in order to protect our living standards and create more jobs for a growing population?

Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Link to this | Hansard source

What we need to do is continue to implement our plan for a stronger economy and more jobs. We need to continue to pursue our plan to get our expenditure as a government on a more sustainable foundation for the future. When we came into government we inherited a weakening economy, rising unemployment and a budget position that was deteriorating rapidly. Today, economic growth is strengthening, jobs growth is stronger than it was in the last year of the Labor government and the budget position is getting under control.

I see the sceptical look of Senator Cameron, but these are the facts. These are the facts: economic growth in 2014 was 2.5 per cent compared to 1.9 per cent in the last year of Labor. In 2014, about 600 jobs were created every day—three times more than in the last year of Labor government. The good news does not end there. In 2014, export volumes in Australia have risen by 7.2 per cent. (Time expired)