Tough budget? I have some confronting news. This is a tough budget and the next budget will be tough. And the reason is that from 2011 onwards the number of baby boomers exiting the workforce is greater than the number of Generation Ys entering the workforce.
It didn’t matter when boomers turned 30 or 40 or 50 or even 60 because they were still in the workforce paying tax. It matters when boomers turn 65 because they are eligible for the age pension and other benefits. And quite rightly boomers will argue that they are entitled to benefits as they have made contributions to the tax base over their working lives.
The problem is that we have become used to a standard of living that is not supportable by the existing worker base. Either workers pay more tax or boomers go with less in retirement or we increase the number of workers through better participation rates and high levels of migration.
The reality is that we will probably do all of the above and, guess what, there still won’t be enough tax to deliver to our expectations. And that is why the toughest job in the Australian economy for the next generation will be that of Treasurer. It’s a no-win situation; no-one will be happy with the decisions the Treasurer makes for the next 20 years. Personally I think politicians of all persuasions should be embarking upon a grass roots campaign to shift the core thinking of the Australian people from ‘the age of entitlement’ to ‘the era of obligation’.
As a nation everyone, rich and poor, old and young, employed and unemployed should be making some kind of contribution (and it may not always be financial) to the well-being of the nation. Paying tax, volunteering, building a sense of community, where possible reducing exposure to public support. That’s the culture we need; that’s the kind of leadership we need; that’s how we can ensure that Australia remains prosperous and cohesive for generations to come.