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Paul Bongiorno: Future shocks highlight the urgency for bolder action

The Treasurer is leaving us begging for more after every episode of the Intergenerational Report.

The Treasurer is leaving us begging for more after every episode of the Intergenerational Report.

The release of the Intergenerational Report is taking on many of the features of a long-running TV soap opera, with the Treasurer leaving us begging for more after every episode reveals another piece of the story.

Jim Chalmers isn’t the first treasurer to use this over the horizon political radar to shape the policies he believes are needed now to deliver better outcomes for the nation and its people.

So far, this sixth report in the series since 2002 tells a broadly familiar story; we are getting older, living longer and the bill to provide the sort of assistance and services Australians have come to expect of their government is getting eyewateringly larger.

The report warns that $140 billion will be needed every year for the next four decades to fund Medicare, aged care, the National Disability Insurance Scheme, defence and interest payments on government debt.

Fortunately, it also reveals that the economy is expected to be around two-and-a-half times larger in real terms in 2062-63 than in 2022-23, so even with projected slower population growth it is still to reach 40.5 million and there should be more taxpayers to help out.

Except with a tripling of people aged over 85 it’s not enough to cover the bill.

And on cue, the Business Council of Australia has released the latest of its reports on the state of the nation called Seize the Moment and typical of its forerunners, the moment the government should seize is to cut business taxes, leave the Stage Three tax cuts in place and raise the Goods and Services Tax.

Treasurer Jim Chalmers politely rejected touching the GST, which of course hits lower-income Australians hardest. He instead nominated taxing multinationals, high-balance superannuation, cigarettes, offshore gas producers and ensuring compliance.

Stage Three tax cuts

The Treasurer didn’t mention the Stage Three tax cuts, which are massively skewed to high-income earners and, according to the latest estimates from the Parliamentary Budget Office, will cost $20.4 billion in their first year, rising to an annual cost of $42.9 billion within 10 years.

That is a gigantic amount of foregone revenue.

Stage Three tax cuts is hugely unpopular within the Labor Party and only furious behind-the-scenes wrangling at last week’s national conference managed to head off a motion calling for its abolition.

In many ways, this is symptomatic of the cautious approach the Albanese government is taking as it seeks to establish its credibility and lay the foundations to winning future elections.

One of Labor’s most formidable power brokers, Graham Richardson, now a commentator on Sky News, believes Albanese is well on the way to fulfil this ambition.

Richardson marvelled at the party discipline at last week’s talk fest and welcomed the fact that it was “boring”.

Albanese summed up his approach in his keynote conference speech by saying: “Today each of us understands that winning and holding government is not only true to our principles, but also essential to fulfilling them.”

Running out of time

But as the episodes of the Intergenerational Report we have already seen reveal, the time for the sort of reforms needed to assure the nation’s prosperity is running short.

The Greens are convinced that unless Labor shows more urgency on issues like climate, housing supply and affordability it risks losing majority government at the next election.

Greens leader Adam Bandt says the current Senate crossbench is far more disposed to bolder reform than the Labor government is bowling up.

We are unlikely to see what the Intergenerational Report is saying about climate change until Chalmers releases the full report on Thursday; but it can’t avoid agreeing with the United Nations Secretary General Antonio Guterres that the “earth is boiling” and business as usual is leading to even more catastrophic weather.

Chalmers on Monday welcomed the Business Council of Australia’s support for decarbonising the economy, and their seeing it as an opportunity.

Need for strong leadership

If ever the nation needed strong leadership it is now.

Albanese has shown in his championing of the Voice to Parliament he is willing to show leadership despite formidable obstacles.

The Prime Minister told Labor delegates “we take this on not because it’s convenient, but out of conviction”.

Courage, as we know from the old British political sitcom Yes Prime Minister can be a euphemism for being foolhardy, but if Albanese is “here to change the country” for the better, as he says, he needs to chance his arm more, especially in light of his treasurer’s latest assessment of future shock.

Paul Bongiorno AM is a veteran of the Canberra Press Gallery, with more than 40 years’ experience covering Australian politics

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