A synopsis of the problem
Few of us consider in our youth that we shall ever know the kind of frailty and vulnerability suffered by so many of our elderly. Even the more immediate prospect of dependence upon an under-resourced public health system is not enough to galvanise us into awareness or action.
Our politicians must accept their measure of responsibility. There is a systemic undermining of the tax base and its progressive structure. Successive rounds of tax-cuts are readily accepted as a device to appeal to strategic layers of self-interested voters. Rather than lead public debate, many are won over by the spirit of opportunism - as opposed to appeal to our “better angels”; the spirit of compassion and kindness.
The consequence, of course, is a surfeit of care, with the health, dignity and happiness of our elderly below what is acceptable.
There are a few broad areas of concern to this paper: all broadly pertaining to the subject of rights for the aged.
There is the question of aged care, including the responsibilities of hospitals, and the role of hostels and nursing homes.
Also, there is the need for additional aspects of care: in areas such as dental care, energy, air conditioning, and heating.
All these concerns need to be addressed in light of Australia’s ageing population - and the structural fiscal impact this will have on future Federal budgets.
The impending crisis of the ageing of Australia’s population - and its fiscal consequences - were addressed by the first Intergenerational Report in 2002, and in another Intergenerational Report in 2007. Specific areas of concern include pensions, aged care, health care, and a narrowing taxation base.
The projected “fiscal gap” arising from such expenses was projected to be about 5 per cent of GDP by 2041-42. (2002 report), or about 3.5 per cent of GDP by 2046-2047 (2007 report).
To get this in perspective, 5 per cent of GDP today is more than $50 billion. The difference in estimates here serves only to underline the fact that it is impossible to pinpoint any such “fiscal gap” almost 40 years into the future.
Government must decide between austerity and the “user pays” principle, or progressive taxation reform - with increased tax and social expenditure as a proportion of GDP. As the years pass the choices facing legislators will grow ever more stark.
The second (preferred) option implies “locking in” structural budgetary commitments to maintain services and pensions for aged Australians. The narrowing taxation base also implies that higher taxes will also prove necessary to maintain and expand the social wage and welfare state for all Australians.
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