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Future challenges for the Australian Nation: the changing Australian society

By John Howard - posted Thursday, 30 August 2001

First among the future challenges is the need for an ongoing response to a change of historic proportions within our society – the ageing of our population.

Australia is no different from most other developed countries in facing an unprecedented ageing of its population. By the time today’s toddlers are starting their own families, the ratio of working-age Australians to retired Australians would have fallen from more than five to one as it is today to less than three to one.

This development demands many responses.


Most critically, it requires a future revenue base that will not only grow with the economy so that we can fund the services needed by an ageing population but also in a way which does not impose an incentive-sapping burden on working-age Australians through ever-increasing income tax.

That is one of the major reasons why we introduced a goods and services tax. That is why the GST’s maintenance is essential to our economic and social future.

History will judge that the government’s introduction of the goods and services tax has done more to prepare our economy for the demands of an ageing population than any other single tool of public policy.

We recognised the shortcomings of Australia’s old indirect tax base. We understood that unless there was change, the retirement of baby boomers in coming years meant that an ever-increasing tax burden would fall on Australian workers through higher rates of personal income tax.

Those people who argue that the GST should be rolled back must be held accountable – they are, in effect, arguing to consign our children to ever higher rates of personal income tax.

The first step in ensuring the long-term viability of the health system and its ability to cope with the demands of an ageing population has been taken by our promotion of choice in health care and greater usage of the private system. The health reforms have enabled millions more Australians to take more responsibility for their own health and medical care and, in doing so, eased the growing pressure arising from an over-reliance on the public system.


Our vastly stronger fiscal position has increased our capacity not only to support but also reinforce the social security safety net via the pension system which is so crucial for retired Australians.

The massive repayment of Labor’s debt has provided $4 billion a year in interest savings which can now be invested into areas of social need.

The absence of the government from financial markets has helped lower interest rates. The earlier repayment of mortgages which this has facilitated will allow Australians to boost their capacity to save more and build up their assets for retirement.

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This is an edited extract from a National Press Club Address given at the Great Hall, Parliament House on 1 August, 2001. Click here to read the full text of the speech.

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About the Author

The Hon John Howard MP is Prime Minister of Australia and Federal Liberal Member for Bennelong (NSW).

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