Joe Hockey's Intergenerational Report is a long term prediction of Australia's economic challenges, a justification for Hockey's harsh but (according to the report) necessary budget cuts, and the most demonstrable horseshit any Australian government has had the audacity to pass off as economic analysis.
The report argues that over the next 40 years Australia's ageing population will add to the cost of health and welfare services. With all the political objectivity of a Murdoch editorial the report justifies the government's policies of cutting programs and spending, extending the retirement age and halting wage rises and penalty rates as necessary to return the budget to surplus and meet the challenges of 2054. Hockey has taken to using the term "intergenerational theft", meaning that Australians expecting the government to maintain current spending levels is effectively steeling from our children and grandchildren, because the one thing this government has learned is that using children for leverage gets results.
Putting aside the question of how a government that was $10 billion out on its budget projections after just six months can accurately predict spending over the next four decades, Hockey and his report completely ignore the actual problem, which is not government spending but a sharp decline in government revenue. Here's why:
Between 2005 and 2007 the Howard government delivered a series of tax cuts which saw 80% of the proceeds going to the top 20% of income earners. Over the next seven years those tax cuts cost the budget bottom line $169 billion, last year they cost $30 billion. Add to that the $9 billion Hockey unnecessarily gave to the Reserve Bank and we would already be in surplus. By 2054, those tax cuts will have cost us well over a trillion dollars.
Australia is the fifth lowest taxing country in the OECD, we have been in the bottom third since 1965. If Hockey or anyone else in this government actually gave a toss about our children and grandchildren they could reverse Howard's profligate tax cuts. If they're genuinely concerned about our ageing population they could reverse their seven year freeze on superannuation contributions which has already cost us a trillion dollars from when Howard and Costello first did it in 2002. Then there's $40 billion a year in superannuation tax concessions which sees the top 10% income earners pay even less tax.
The government's response can best be summed up in the worlds of one of their media mouthpieces Janet Albrechtsen: "Yeah, slug the über-rich. But don’t touch my handouts". By handouts she means funding for schools, hospitals, penalty rates, pensions, Medicare, science and research, regional development, indigenous support, child care and a whole range of crucial public services that benefit us all. Slugging the über-rich means expecting the same tax and superannuation rules that apply to us should apply to them. And they accuse us of intergenerational theft.