Article excerpt:
THE budget has made a modest but significant start on tackling the biggest issue facing governments in the long run - the ageing of the population.
Paring back the subsidy for private health insurance for higher income earners, tightening the means test for the pension and reducing the additional amount people can tip into their tax-advantaged superannuation accounts all contribute to the Government eventually wrestling a ballooning budget deficit into submission.
In particular, these measures will help offset the $16 billion over five years it will cost to raise the pension and increase assistance for carers.
Article summary:
It will take 12 years for the savings to match this cost and will require the qualifying age for the age pension to be increased to 67 years between 2017 and 2023.
The final report of the Harmer review of pensions points out that the cost of any pension increase today will double as a proportion of national income by 2050.
The ageing population has greatest impact on health spending as older people use most of the health services, and advances in technology mean they will remain alive longer but at a huge cost.
Logic calls for the Government to focus health spending where it will produce the best return rather than providing an across-the-board subsidy for private health insurance.
The government must get really serious about the issue of ageing population.
