Older nation means more cuts needed
Australia's finances will sink under the weight of spending on health, education and the age pension unless the Federal Government makes even deeper cuts.
The fourth Intergenerational Report, to be released today by Treasurer Joe Hockey, shows the Government faces a $200 billion blowout in spending by the middle of the century unless change takes place now.
_The West Australian _can reveal the report will show that without any change, Budget payments will reach $1.7 trillion, or 37 per cent of GDP, by 2055.
The previous record expenditure outside wartime by any government was in 1984 when it hit 27.6 per cent of GDP.
The sharp increase over the coming four decades will be driven by the ageing of Australia's growing population. Spending on health, the age pension and aged care will all grow sharply.
Mr Hockey will argue that spending cuts taken in last year's Budget have dramatically reduced the ramp-up in spending but a string of measures either blocked in the Senate or abandoned means there is still a huge increase that future taxpayers will have to cover.
In today's dollars, that shortfall is about $200 billion.
Previous Intergenerational Reports have underestimated the increase in Australians' expected life spans.
The new report predicts the average Australian male born by the middle of the century will live 88 years and a female about 90.5 years. Given technological improvements, even these average ages could be short by about seven years.
And there may be up to 37,000 people now approaching pension age who will live to their 100th birthday - a sevenfold increase in the number of centenarians.
Mr Hockey said the rising life expectancy would be a key feature in the report.
The Government is planning an advertising and community engagement program around the report.
