Last week the usually boring Australian Government Productivity Commission briefly made headlines.

Immediately the vested interests came out finding everything wrong with the policy recommendations in the Commission’s report “An Ageing Australia: Preparing for the Future“:

• You can’t raise the pension age to 70! … What about the people who just can’t physically work that long?
• You can’t take away some of the accumulated value in my home to pay for my aged care! … That’s just not fair, not Australian!
• You can’t improve productivity in the health sector! … That will lower the standards of care and cost jobs!

And then the headlines disappeared …

… Until a couple days later when the respected Grattan Institute released a report on a similar theme, “Balancing Budgets: Tough Choices We Need to Make” They agree with the Productivity Commission’s policy ideas; and went even further. They reckon on the need for removal of tax concessions and pensions from people that don’t need them, increasing capital gains tax and the GST, and much more, if we are not to descend into a bottomless fiscal hole.

A few Government hands came out and said: … Tut tut. Don’t worry. The adults are in charge now. Go back to being relaxed and comfortable. … or words to that effect … and then went back to stopping the boats and offending the Chinese, or whatever it is they are doing …

The media then fell silent … such is the quality of engagement and debate with big, long term issues for the country.

What underlies this is demographics. Nothing anyone can do will change the fact that the population is ageing. The proportion of people dependent on their savings or the public purse will rise, and the proportion of people in productive work to fill the public purse will fall. The consequence is unarguable: entitlements and benefits must fall; taxes must rise; or both.

But our politicians, focused as they are on retaining power and winning the next election just two and a half years away, don’t want to know. Immediate sugar hits win votes.

Of course this issue is not unique to Australia. We only need look to Japan, most of Europe and the USA to get a viewing of what could be in store for us. As the population ages, as the need to consume lessens, as technology takes more jobs, as unemployment rises, as more people become more dependent on others to bear the cost of their welfare, living standards stop rising as fast; then they stop rising at all; then they fall.

It’s also true that this broad issue has been on the agenda for a generation. In the 1980’s superannuation started to appear in wage awards. Then, with a clear vision of what the future was going to deliver, Paul Keating introduced us to the compulsory superannuation guarantee in 1991. The need to reduce dependence on the public purse was clear.

Peter Costello followed with the introduction of the first Inter-Generational Report in 2002. Costello’s enthusiasm for addressing these long term issues was not shared by Howard, who was all about the here and now and more intent on ensuring enough “bread and circuses” for the voters so he could stay in power … (until he couldn’t).

Costello battled on and introduced the Future Fund in 2006 (but it’s fallen well short of objectives), and another Inter-Generational Report in 2007. Swan sponsored a third IGR in 2010.

So the Reports released last week are not news. Those interested and concerned have known what is coming for a generation already.

We now have $1,750 billion in superannuation assets, which is great, but nothing much else. Certainly we don’t have a wide comprehension of the inevitable issues beyond the next bend in the twisting road called the future economy.

Most importantly, after 20+ years, we have a body politic asleep at the wheel, or cynically focused on other matters, and a populace that is unaware that the light at the end of the tunnel is an approaching train …

… more on this later …