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establishing authoritarian rule? « Previous | |Next »
August 26, 2014

Contrary to the rhetoric from the Abbott Government Australia doesn't have an imminent debt crisis or a budget emergency. Australia has a long-term structural budget problem caused by an ageing population, which the Coalition is not seriously addressing.

An ageing population means the government needs to spend more (on pensions and health care) it will also receive lower income tax. If the government does nothing it will experience a rise in the structural budget deficit.

PopeDbudgetemergency.jpg David Pope

The Coalition is more concerned with using the rhetoric of national security and terrorist threats in Australia to put in place the steps to establish authoritarian rule. One of these steps is the way the proposed national security legislation that ASIO is demanding that journalists could be jailed for revealing intelligence operations. Journalists could face penalties even if they did not explicitly know what they were reporting on was linked to a special intelligence operation.

There are three tranches of counter terrorism legislation being proposed by the Coalition. The first allows ASIO to surveil more computers and whole networks, and cracks down on whistleblowing; the second tranche relates to the prosecution of foreign fighters returning from war zones; and the third concerns a mandatory data retention regime for consumer metadata.

The money to fund counter terrorism will be easily found. The cancer of budget repair miraculously disappears when it comes to the spooks. This suggests that the budget is really a vehicle to start imposing a free market economic model on Australia.

An example of this top-down imposition is the deregulation of universities. In the market-based model a student-consumer can simply buy an education. If things go wrong or the student ends up lacking the promised knowledge and skills, it is the seller’s fault in that the product is deficient. And they will be since the higher education institutions are driven to maximise resources rather than ensure the integrity of the educational services they offer.

It was never foreshadowed prior to, or during, the election campaign. Both Abbott and Pyne ruled them out, as they promised a period of relative policy stability in which changes already made (eg., the move to demand-driven courses) can be digested and adjusted to. The Coalition is trying to bludgeon its neo-liberal reforms through the Senate.

It is supported by the Group of Eight as these neo-liberal reforms will strengthen the Group of Eight at the expense of Australia’s Higher Education sector as a whole. So for the Group of Eight it’s fewer students, more research and higher rankings in the prestigious international university rankings. Teaching students will be concentrated elsewhere, in the non Group of Eight universities, some of which over time will be pressured by competition in the deregulated market to become teaching only institutions.

A free market model for an ageing population is self-reliance. Older Australians are now working longer, possibly due to better health, but most likely because of a realisation that they simply need to keep earning to boost insufficient retirement savings. They realize that the Coalition will cut costs by by reducing the pension--that is what is meant by 'ending the age of entitlement.' However, increased work levels are still not producing a sufficient income for the majority of older Australians to lead comfortable lifestyles.

| Posted by Gary Sauer-Thompson at 9:45 AM | | Comments (5)


What is Labor's solution to Australia's long term problem of aging population. What is Gary's solution?

"What is Labor's solution to Australia's long term problem of ageing population"

The issue is one of decreasing numbers of economically active people in the population and more elderly dependents.One of the drivers is that people are living longer thanks to improvements in health, diet and preventative health care. .

What has be done about it so far? The policies that have been put in place include:

(1) People are encouraged to save for their retirement in pensions and investments.

(2) The retirement age is increasing.

(3) Economically active skilled and unskilled migrants could be encouraged to cover the gaps in the workforce.

(4) making it more attractive for both women and older workers to stay on at work or to find economically useful and personally challenging work once they approach or pass the age of retirement.

Population ageing is largely a positive outcome, primarily reflecting improved life expectancy.Life expectancy has risen by more than 25 years since the turn of the 20th century.

An ageing population will, however, affect labour supply, economic output, infrastructure requirements and governments' budgets.

The Coalition's approach to an ageing society is along the lines of … attacking spending … the winding-back of universal access to payments and entitlements from the state. This will require the redefining of the concept of mutual obligations and the reinvigoration of a culture of self-reliance.

One problem is that many people haven't saved enough in superannuation to afford them a comfortable standard of living in retirement. The post-retirement income is too low. Superannuation and the aged pension together are not ensuring a comfortable standard of living for Australians living longer life spans. The people whose retirement savings will be most inadequate are predominantly women, the low-paid and casual workers.

What is going to be done about it? The Coalition is proposing to abolish the superannuation payment to people earning under $37,000 per year.

Secondly, they propose that the real rate of the aged pension goes down, as the government struggles to fund benefits for the aged. This fits with the Coalition’s approach to ageing and aged care: self-reliance.

Have a read of this Per Capita Report Les