Intergenerational Debt

26 Nov 2003 archivespeech
This speech is about population policy and intergenerational debt from a generation X perspective.

The Hon. J.M.A. LENSINK: I wish to make some brief comments today about population policy and intergenerational debt from a generation X perspective. This is an issue which has recently received quite a lot of profile, courtesy of the Reserve Bank and some comments that the health minister made at last week's COTA AGM. In particular, minister Stevens referred to the commonwealth's inter-generational report which was released last year in the commonwealth budget papers. I have read the report from cover to cover because it addresses things of interest to me, in particular, sustainability of government finances, demo¬graphic changes in the nation and projections of revenue and expenditure in key areas of health, education and welfare portfolios.

One would think that undertaking such a scenario analysis over a 30-year time frame would be a useful thing to determine how vulnerable the government will be into the future. Interestingly, this is the rationale for the state govern¬ment's Menadue review into health. Both reviews concluded that the way that we spend money on the subjects of their respective studies is currently unsustainable. I was amazed to hear the health minister describe the commonwealth report as `ugly', promoting `intergenerational conflict' and based on `flawed methodology'. I was bemused that there were no arguments advanced for those assertions.

In 30 years I expect still to be in the work force. People of younger generations than myself will be buying their first homes and starting careers and families, while older folk will require government transfers via the Pharmaceutical Benefits Scheme, pensions and health care. I am quite happy for governments to be forward thinking enough, now, to reduce our tax burden in the future. I would have been even happier if Whitlam had not been so carefree and made his generation believe that everyone had a right to all sorts of free services, including a university education. I would have also been happy if those who could afford to do so in previous genera¬tions had been forced, as I am, to make provision for their own retirement.

We all know of the current threat to the great Australian dream of owning our own home. Again, it is younger generations which are relatively disadvantaged. The Reserve Bank may have been using somewhat alarmist language when it referred to `intergenerational conflict' but I was pleased that it put baby boomers on notice about their well documented taxpayer funded high expectations, which are necessarily at the expense of X, Y, Nintendo and other following generations.

 Younger people have already had to be better trained and educated to get their first job. We do not have the easy pathways of previous generations. Consequently, job opportunities and financial security are at the top of the priority list even though there are some people in my age bracket who alleviate this by staying at home or by deferring serious financial decisions. When I heard about the latest summit—managed, as usual, by baby boomers—wondering, `What can we do to get our young people to breed?' I felt like saying, `It's the expense, stupid.' Additional fees and charges that this government is imposing hit individuals and aggra¬vate these problems. Government imposts on business, such as WorkCover costs, tax jobs and opportunities.

I will briefly outline some of those. Courtesy of the Rann Labor govern¬ment we have had a new River Murray tax; increased gas bills (they were to go up by 5.6 per cent but who knows what they might be now); fines and traffic offences are to increase by 5.9 per cent; increased training costs are to be borne by apprentices and trainees, some up to 50 per cent; increases in car registration; and so on. Due to the increase in property values, there is a windfall to the government of about 45 per cent from areas such as stamp duty, ESL, land tax and water and sewerage.

I would like to remind the government that it needs to spend its funds wisely and efficiently and collect them wisely. In my view, this government's social engineering approach will directly hinder economic development, reduce opportuni¬ties for young South Australians and contribute to falling fertility levels.