Intergenerational claptrap

One could be forgiven perhaps, for thinking that the Federal Government's Intergenerational Report (2002-03 Budget Paper No. 5) was specifically written as an apologia for the Government's draconian cuts to disability pensions, the Pharmaceutical Benefits Scheme and the proposal to change people from the Disability Pension benefit to the Newstart allowance.

This Report claims to "provide a basis for … identifying issues associated with an ageing population." and that "… a steadily ageing population is likely to continue to place significant pressure on Commonwealth government finances." Yet it asserts somewhat paradoxically that "… the ageing of the Australian population is not expected to have a major impact on the Commonwealth's budget for at least another 15 years …"

The entire Report is based on false assumptions.

Pamela Kinnear, a researcher at The Australia Institute, has identified these contradictions in her discussion paper "Population Ageing Crisis or Transition?"

Writing about the "ageing crisis" Ms Kinnear states that it "… is founded on three main assumptions: that older people are a social and economic burden; that population ageing will result in a serious dependency ratio imbalance; and, that there is a close correspondence between the size of the aged population and increased public expenditure. These assumptions are largely invalid."

She points out that only "3.5 per cent of Australians over 65 require public assistance for daily living", that older people "make significant contributions of time and money to their families …", that dependency ratios "… erroneously equate dependency with age." and that "Because youth dependency is declining, total dependency ratios by 2051 will be approximately the same as they were in the 1970s."

The Report baldly asserts that government policies are generating jobs and higher incomes for Australia, but it is apparent that the figures are being fudged both for unemployment (people working for as little as one hour per week are not included in the unemployment figures) and for income levels (obscenely huge CEO salary packages are used in determining the mean level of "wages" in Australia).

On superannuation, the Report states that Australia's superannuation system generates private savings for retirement. This assertion begs the question as superannuation can only be effective where there is stable, full-time employment … a condition rapidly being dismantled by Federal policies with their emphasis on part-time, casual and short-term contract employment and the continuing acceleration in the reduction in full-time jobs.

Then too, there is anecdotal evidence that governmental and corporate organisations have retrenched employees before they neared their maximum superannuation entitlement levels, in order to avoid payouts for which they had not made adequate financial provision.

There can be little doubt that the Report's emphasis and the government's actions to reduce growth in government spending are clearly and unequivocally aimed at the welfare sector.

One can recognize that the government's ideology and the policies driven by that ideology will inevitably lead to the privatisation of social security. The current level of restructuring in Centrelink towards its corporatisation must be seen as a clear indicator of the government's intent.

The government report stresses that it is maintaining "… an efficient and effective medical health system, complemented by widespread participation in private health insurance."

What a farcical assertion!

The much-touted 30 per cent rebate of the Howard Government, supposedly aimed at encouraging "ordinary" Australians to take out private health cover has proved to be an expensive and less than equitable failure.

The rebate is concentrated in households with the highest income levels. About half the subsidy goes to the top 20 per cent of high income earners.

Julie Smith, Senior Research Fellow of The Australia Institute has highlighted this in detail in her discussion paper.

Ms Smith stated that "The cost of providing subsidies for private health insurance … is draining funds from public hospitals and other public health priorities."

"While public sector cutbacks over the last decade have resulted in queues in public hospitals and the axing of public dental care services, the Federal Government now provides a large public subsidy through the private health insurance rebate for high-income earners to jump hospital queues, obtain cosmetic surgery and dental care, and pay for their gym club membership. Each year, the private health insurance rebate alone is drawing around $2 billion of government funding away from public health care provision.

"Current Coalition health policy directs an increasing portion of scarce Commonwealth health funds towards the top end of the income stream regardless of demonstrated health needs and public health priorities.

"Present deregulatory trends point to an emerging policy of allowing private health insurance funds to cream off the most profitable part of the Australia's health insurance market, while leaving an underfunded public hospital system to provide care for the bulk of those with urgent or chronic health care needs."

There can be no doubt that the health sector, as well as Centrelink, is being readied for sale.

The Report claims that the government has a "social safety net that encourages working-age people to find jobs and remain employed" and "encourages mature age participation in the labour force …"

Yet, in its blind adherence to "economic rationalism" the very same government has presided over the greatest loss of full-time jobs in the nation's history, has encouraged businesses to replace permanent positions with part-time, casual and short-term contract staff. The Government has largely ignored the massive and continuing retrenchment or laying off of mature and/or experienced staff by business, other than for an occasional token scattering of vapid news releases or expensive colour brochures at the problem.

The Report makes particular mention of the "continuing growth in (the cost of) the Pharmaceutical Benefits Scheme" but there is no current debate in Australia about prescription drugs, their high cost, how to pay for them or the practices of the billion-dollar, largely foreign pharmaceutical industry.

Crucial questions that have not been asked include: What drugs are we getting for our money? Are the new drugs on the market really better than the old drugs? How are consumers supposed to know which drugs are best when according to the study by the (US) National Institute for Health Care Management Foundation, only 15 percent of the 1,035 drugs approved by US regulators between 1989 and 2000 were based on a new molecular entity and deemed by the Food and Drug Administration as ''providing significant improvement over existing medicines.''

Perhaps the debate about the PBS should not be how can we pay for all these drugs, but rather, is the current system working and are consumers and patients who spend billions of dollars each year on prescription drugs really getting their money's worth?

For those with the eyes to see, the Intergenerational Report is a document of misrepresentation based on invalid assumptions to justify the discredited ideology and callous budget decisions of an unfeeling and visionless government.