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The future is grey

The future is grey

Broadcast: 01/02/2010

Reporter: Chris Uhlmann

Treasury released the latest intergenerational report today, forecasting a greying population, a
shrinking workforce and growing pressure on the public purse.


KERRY O'BRIEN, PRESENTER: For the third time in the space of a few years, the Department of
Treasury has peered 40 years into Australia's future and seen a greying population, a shrinking
workforce and growing demands on the public purse.

Releasing the latest Intergenerational Report today, Wayne Swan admitted there were challenges
ahead, but said he wasn't daunted by them.

Amongst the challenges is meeting the needs of a population expected to tip 36 million, when 22 per
cent of the nation will be over 65 years of age.

Unchecked, the widening gap between workers and retirees will see average growth in the economy
will fall and the cost of health and aged care services rise dramatically. To combat it, the
Government wants to grow the pie, with more people overall, more productive workers and some mature
age Australians working into old age.

The big headache, economic and political, will be how it's managed.

Political editor Chris Uhlmann reports on some of the early shots in this election year.

CHRIS UHLMANN, REPORTER: As the summer of sport winds down, the politicians have rolled off the
bench to kick off their new season.

The new leader has clearly energised some in the Coalition's team.

ERIC ABETZ, LIBERAL SENATOR: We've got our political mojo back.

CHRIS UHLMANN: And key players know much is expected of them in this election year.

BARNABY JOYCE, NATIONALS LEADER: It's just the gift that keeps giving: Barnaby Joyce.

CHRIS UHLMANN: Hostilities resume in Parliament tomorrow, but many MPs and senators are already in
Canberra, trying to lay down the major themes of the year. The game will pick up where the last one
ended: the battle over the Government's emissions trading bill.

RADIO COMPERE: Senator Wong, the Senate has already rejected the ETS bills twice. Why are you
trying again? Is there something we don't know?

PENNY WONG, CLIMATE CHANGE MINISTER: Well, let's remember this is a piece of legislation that a
couple of months ago the majority of the Liberal Party supported.

CHRIS UHLMANN: But that bill undid the last Liberal leader and the new one has a very different
world view, and he's been buoyed by the failure of the world to reach an agreement on tackling
climate change.

TONY ABBOTT, OPPOSITION LEADER: We have to save Australia again from Mr Rudd's great, big new tax
and we won't let the Australian people down.

CHRIS UHLMANN: He promises to produce a credible alternative plan, but even he concedes it will
come with a price tag.

PENNY WONG: There isn't a cost-free way to tackle climate change, and Mr Abbott's approach is one
that is not being followed in any other advanced economy. He's on his own on this issue.

CHRIS UHLMANN: In the end the battle over climate change policy isn't just about the environment,
it's about the economy. And that's where federal election battlelines are usually drawn, and the
Government has a strong story to tell.

WAYNE SWAN, TREASURER: We've passed through a period of global economic turmoil and emerged in
better shape than just about any other advanced economy.

CHRIS UHLMANN: But Labor's economic pitch is, like the last time, also aimed at winning the battle
for the future. The Treasurer released the third Intergenerational Report today, and it projects
that by 2050 Australia's population will have grown to 36 million, substantially more than the 28
million Treasury expected just three years ago. One reason is that people are having more children.
The other is migration.

CHRIS RICHARDSON, ACCESS ECONOMICS: The assumption this time is 180,000 migrants a year. In the
2007 edition we were expecting 110,000 migrants a year. So that's quite a big difference.

CHRIS UHLMANN: But the population will be greying. Today about 13 per cent of Australia is aged
over 65 years. In 2050, it's projected to be above 22 per cent. That will slow the rate of economic
growth from its 40-year average of 3.3 per cent, to 2.7 per cent. The cost of health care, pensions
and aged care will drive up government spending from about 22 per cent of the whole economy to 27
per cent. That will see a growing annual gap between what the government raises in taxes and what
it spends.

CHRIS RICHARDSON: The Government says that Australia's national social compact with itself, that we
use the federal budget to tax workers, to pay for stuff is gonna be in trouble as people age and as
health care costs rise faster than other costs.

CHRIS UHLMANN: One part of the Government's answer is to grow the pie with a larger population,
more productive workers and encouraging the ageing to stay in the workforce and the Treasurer
released a $43 million plan aimed at encouraging the mature aged to work on.

WAYNE SWAN: The choice for older Australians to stay in or leave the workforce should be just that:
a choice, not something which is forced upon them by prejudice or by bad policy.

CHRIS UHLMANN: Its other weapon is to cut spending.

CHRIS RICHARDSON: The Government's answer is it's gonna close the gap by cutting spending rather
than raising taxes and that's a very big task to do.

CHRIS UHLMANN: One of the good news stories in these new figures is that the projected fiscal gap
actually falls against where it was predicted to be in 2007, from 3.75 per cent of GDP to 2.75 per
cent, but that's based on the assumption that it meets a sustained and ambitious spending cap.

CHRIS RICHARDSON: And it's talking about $13 billion a year in cuts just in the next handful of
years. That is the equivalent, for example, of all the health payments from the Feds to the states
every year, or the equivalent of all the federal spending on schools every year. That's a lot of
money before you even get to these longer-term tasks.

CHRIS UHLMANN: The Treasurer pointed out that the Coalition is blocking the Government's attempts
to cut spending through reforms to the pension and means testing the private health insurance

WAYNE SWAN: All up, these reforms result in a cumulative reduction in spending of $275 billion in
today's dollars by 2049-50, with the reforms to the private health insurance rebate alone
accounting for $100 billion of this amount.

CHRIS UHLMANN: It was the point the Prime Minister was keen to hammer yesterday.

KEVIN RUDD, PRIME MINISTER: What the Intergenerational Report tomorrow will reveal for the first
time is that the cumulative impact of knocking that major reform back is in the order of $100
billion over the next several decades.

CHRIS UHLMANN: But the figure doesn't appear in the Intergenerational Report.

JOE HOCKEY, SHADOW TREASURER: Give us the modelling on the $100 billion. $100 billion sounds
terribly even.

CHRIS UHLMANN: And while the report does say that climate change represents one of the most
significant challenges to economic sustainability, it shows the Government presiding over a
dwindling petrol tax.

CHRIS RICHARDSON: Buried way back in the detail it points out that we tax petrol at a fixed 38
cents a litre and have done since 2001 and it says you role that forward four decades from now and
that tax'll collect next to nothing. Now you can't just pretend that these things can be safely
ignored in this sort of analysis. There are tax problems too.

CHRIS UHLMANN: So strap yourself in for election year 2010. It will be frantic and it won't be
dull. Into tomorrow's mix will be thrown the Reserve Bank's latest take on interest rates, with a
market anticipating another rise, so expect cost-of-living pressures and kitchen table economics to
be thrown back at the Rudd Government as the year wears on. But at this stage, it would be a brave
punter who bet on anything other than a thumping Labor victory whenever the election is held.

KERRY O'BRIEN: Political editor Chris Uhlmann.

Swan on Australia's grey future

Swan on Australia's grey future

Broadcast: 01/02/2010

Reporter: Kerry O'Brien

Treasurer Wayne Swan joins The 7.30 Report following the release of the government's
intergenerational report - Australia to 2050: Future Challenges. The report shows the country's
ageing population, climate change and healthcare costs are going to place a heavy burden on the
economy by 2050.


KERRY O'BRIEN, PRESENTER: A growing base of retirees, a shrinking workforce and 60 per cent
population growth in the next 40 years - that's quite a mix of challenges, and to discuss them the
Treasurer joins me now from our Parliament House studio in Canberra.

Wayne Swan, the Government has been talking about Australia's future population and the ageing
population for some time now, with all of the incipient challenges. You've acknowledged that a
population of 36 million by 2050 will also bring big impacts and throw up big issues. Isn't it time
that the Government developed a formal, identifiable population policy about which the public can
have a sensible, responsible debate?

WAYNE SWAN, TREASURER: Well, Kerry, could I make a couple of points? Population growth is desirable
and population growth is inevitable. But that 36 million figure is a projection. It's based on
levels of fertility around about 1.9 births per woman and it's based on levels of migration which
are about the same level as the past 40 years. Now, of course, they will go up and down, depending
upon overall circumstances. The Government is not seeking growth for growth's sake. What we do want
is rising standards of living, we want social cohesion and we want environmental sustainability. So
what we need to do is to put in place all of the policy settings which deliver those objectives.
And they may be delivered by a smaller population or one that is slightly larger, depending on how
those variables go - where the birth-rate goes or where levels of net migration go, because they do
move, Kerry, up and down. In fact...

KERRY O'BRIEN: In part in response to Government policy. It just sounds as if the Government is
moving away a little bit from the sentiment that was coming through late last year - on this
program; Kevin Rudd said he likes the idea of a big Australia. Now, you've also said that you think
that we should be able to plan for and manage that level of population growth. What do you base
your confidence on that Australia can reasonably sustain that level of population just on the basis
of water and arable land alone?

WAYNE SWAN: Well because Australians have always been very good, right through our history, at
adapting to social and environmental and economic change. And the fact is the population will
continue to grow. That's a good thing, because it will deliver rising standards of living. What we
have to ensure is that it delivers also social cohesion and environmental sustainability. That's
why the Government is acting on a variety of fronts. First of all, to put in place all of the
measures to lift productivity, to grow the pie, to lift our standard of living; but also to deal
with dangerous climate change through the CPRS, and also a range of policies to make sure that
Australians have opportunity. That birth does not necessarily determine your progress in life. But
we are not sitting here today and saying there is an ideal fixed population for Australia. It
depends on us putting in place successful policies to achieve those objectives I was talking about

KERRY O'BRIEN: OK. This Intergenerational Report says, "The sustainability of Australia's cities
will also be dependent on better governance in the planning and organisation of city
infrastructure." Who's going to provide that better governance if not the same people who govern
our cities today?

WAYNE SWAN: Kerry, for the first time in our political history we now have a national Government
that wants to work with state government and local government. And when it comes to infrastructure,
we've put in place Infrastructure Australia to commence that planning. We've got a whole reform
process going through the Council of Australian Government organisations to do precisely that. The
previous government sat around the cabinet table, Mr Hockey and Mr Abbott, for years, and they were
observing a growing population and an ageing population, and they refused to come to the party - or
to the table - and deal with those issues. So there's a very big difference...

KERRY O'BRIEN: But what you still don't have is an identifiable population policy.

WAYNE SWAN: We most certainly do have an identifiable policy that deals with our...

KERRY O'BRIEN: What is the heading of this policy? Where is it published?

WAYNE SWAN: Well, Investing in Infrastructure, the Education Revolution, the CPRS dealing with
dangerous climate change - all of those things are the elements that make up a growing standard of
living, a social cohesiveness that we desire and an environmentally sustainable country.

KERRY O'BRIEN: Shadow Treasurer Joe Hockey translates what you've had to say today as meaning that,
"Australians will have to work harder for longer with less reward in more crowded cities." Now
which part of that hasn't he got right?

WAYNE SWAN: He's got all of it absolutely wrong, because you see as I said before, Mr Hockey was a
member of a cabinet that didn't come to the party and deal with all of these issues of planning, of
sustainability and so on. He did none of those things. We've got a comprehensive agenda to deal
with all of those things, because what Mr Hockey and Mr Abbott did and the previous Treasurer did
was that they ignored their Intergenerational Reports and they didn't take any action, and on top
of that they went on a spending spree at the height of the mining boom and locked in permanent
expenditure for circumstances which no longer prevail.

KERRY O'BRIEN: You've got an agenda on paper, Mr Swan, but a lot of the elements of that agenda are
still to be tested. And while Ken Henry, your Treasury Secretary, says that you're gonna have to
find new ways to raise money and you at the same time are talking about significant spending cuts
that you have committed a Labor government to into future years, I'm just not quite sure how you're
gonna do all this, and meet these big challenges.

WAYNE SWAN: Kerry, we've already put in place very significant fiscal restraint through our last
two Budgets. $56 billion in terms of savings. We also put in place the most significant reform of
the pension system in generations. But what we did when we put that in place is we made savings
elsewhere in the budget. We understand that given the challenges that are in this document, this
savings task will be continuing and it will be ongoing. And we have set for ourselves....

KERRY O'BRIEN: OK. But you gotta acknowledge at the same time - and I don't want to invite another
long explanation of why. We understand by now why you introduced your stimulus packages. But there
are those tens and tens of billions of dollars that you've gotta claw back over the next few years.
And that is a part of the equakes, isn't it?

WAYNE SWAN: Yeah, but, Kerry, the stimulus was temporary and if it hadn't been for the stimulus, we
would be starting this task right now that we're talking about in far worse shape.


WAYNE SWAN: Just imagine if we were sitting here tonight with high unemployment, tens of thousands
of business closures, what the enormity of the task would be ahead of this country.

KERRY O'BRIEN: OK. Ken Henry's tax review and what you do about it are obviously going to be
critical to any plan for future prosperity. He's already said quite bluntly that new ways are gonna
have to be found to fund the needs of the projected population. Two of the tax reforms he's already
floated for consideration are a traffic congestion tax, because of the gross inefficiency on our
roads, and environmental taxes to reduce the risk of further environmental degradation. Are you
really prepared to take tough decisions involving new taxes in the kind of political environment we
have in Australia today?

WAYNE SWAN: Well Kerry, the report of the independent tax committee is with the Government and it
is absolutely comprehensive. There's a huge agenda there. The Government is going to take its time
to prepare an initial response and then we will publish that along with the report and we can have
a very substantial and long conversation about the implications for public policy right across the
board. The Government will do that in some months' time and we'll have a full debate. But up until
then, I'm not going to speculate about what may or may not be in the report.

KERRY O'BRIEN: Tony Abbott and his shadow minister - I wasn't asking you to show what was in the
report, I was asking you to acknowledge that there are some big, tough decisions ahead, and I
wonder whether ...

WAYNE SWAN: There's no doubt, Kerry.

KERRY O'BRIEN: ... you're gonna have the courage for that in this kind of political climate where
any hint of a tax increase is absolutely torn to pieces.

WAYNE SWAN: Well, Kerry, I would say we have taken some very significant, tough decisions in terms
of the savings we have already put in place over two Budgets, and we are saying openly in response
to this report that there are further difficult decisions ahead. Made worse, I might say, by the
spending spree of the previous government at the height of the mining boom. But we are prepared to
take those decisions because they're important to our long-term future, they're important to our
standard of living and they're important to our social cohesiveness.

KERRY O'BRIEN: Wayne Swan, thanks for talking with us.

WAYNE SWAN: Great to be with you.

Hand up not a hand out

Hand up not a hand out

Broadcast: 01/02/2010

Reporter: Brigid Donovan

Independent charity The Smith Family is helping to ease the pressure on disadvantaged families at
an expensive time of year - the start of the school year. A new program has been set up by the
organisation that involves sponsorship of underprivileged kids and the establishment of Smith
Family offices inside schools in disadvantaged areas.


KERRY O'BRIEN, PRESENTER: The annual post-Christmas trek back to school is stressful enough in most
households, but it's particularly challenging for parents who don't have the means to make sure
their children are sent off with the right uniform and equipment to start the year. Increasingly,
it's left to welfare groups to fill the gap, with a leading independent charity recently
establishing its own offices inside schools in disadvantaged areas. Brigid Donovan reports.

BRIGID DONOVAN, REPORTER: It's a big day for this household in Sydney's west, with Mariam Behnam
starting high school and her brother Sarmad beginning Year 12. After arriving in Australia as
refugees from Iraq in 1997, education has been a top priority for this family, despite the
challenging cards life has dealt them.

SARMAD BENHAM, STUDENT: The weight on our shoulders is fairly incredible, especially with having a
disabled sister and a single parent. But, that's still no excuse, you know, because our future and
education is important and we still have to, you know, try our hardest in school.

BRIGID DONOVAN: Their father, Amir Benham, is the full-time carer of their disabled sister Lidia.
Life has been particularly tough since he separated from their mother seven years ago.

AMIR BENHAM, FATHER (voiceover translation): I've worked very hard trying to raise my kids and make
sure they get a good education so they can prosper in the future, and it's very important for me to
see my children prosper and live life to the fullest.

BRIGID DONOVAN: In addition to the 30,000 children on Learning For Life scholarships, the Smith
Family provides mentors, leadership programs and after school learning clubs.

MIRIAM BENHAM, STUDENT: We've been shopping for lots of books, pencils, pens - everything, yeah.
All the things cost about $100 or more dollars.

BRIGID DONOVAN: As well as helping with the cost of school essentials, the Smith Family hopes
immersing themselves at the grassroots level will give students extra confidence at a vulnerable
stage of their lives.

ELAINE HENRY, SMITH FAMILY CEO: Unfortunately in Australia we saw about 20 per cent of our kids
being left behind. And it was something that was starting to happen generation after generation.
And it seemed that a lot of effort was going into providing people with a hand out instead of a
hand up.

BRIGID DONOVAN: For the Benham family, it's not just the financial support that keeps them going.
Smith Family sponsors have an ongoing relationship with their students.

SARMAD BENHAM: It's also important to kind of be acknowledged by people and see that there is
support out there for you, not just financial, but, you know, the fact that they, you know, write
letters and check up on you, and that kind of drives you to do better.

BRIGID DONOVAN: It's been a tough 12 months for the Smith Family, with the global financial crisis
and other high-profile disaster funds draining resources away from the 90-year-old charity.

Their latest campaign aims to connect the haves with the have nots by encouraging Australians to
sponsor a child in their own country. In some schools, the Smith Family even has its own office
such as this school in Melbourne's north.

ELAINE HENRY: We can form the trusting relationships. We do the bridging between the have and have
nots, if you like. I don't think government could do that.

got available to you that you can use to supplement your existing resources that have been provided
to the school. Both of the Smith workers attend all of our staff meetings, they're very integrated
into the staff in working with them and that's an important step forward. And then they're going
out into the broader community and supporting us there and bringing families in and making sure
we're able to support them if we need to in various ways.

ELAINE HENRY: We all want to belong. We don't want to be marginalised. We want to look and feel and
think the same as others, especially kids going to school. It's just something natural. And, you
know, even the little ones can understand very sensitively that they're different. They can
understand that mum or dad just can't afford that excursion or send them off to swimming.

BRIGID DONOVAN: It's the extras that children from lower income families often miss out on. The
Smith Family has joined forces with Lifesaving Victoria and state and local governments to provide
free swimming lessons to these new migrants in Melbourne's western suburbs.

MUMU KUNOO, MIGRANT (voiceover translation): I'd like to thank the Smith Family because this is
helping my children to be healthier and have some social life in Australia.

BRIGID DONOVAN: As the days in the pool are coming to an end, another Melbourne family is shopping
for new school shoes. For single mother of two Brigette Fletcher, the Smith Family has taken the
stress out of the return to school blues.

BRIGETTE FLETCHER, MOTHER: This does give me that little bit of freedom, I suppose, to be able to
go and get them what they do require for school, and, you know, I s'pose not have to write notes
every week because they haven't got their proper school uniform on.

BRIGID DONOVAN: With term one having just begun, the Smith Family hopes to increase its presence in
schools in coming years.

GLENN PROCTOR: Kids that stay on to Year 12 and the Smith Family are supporting us in that are
successful and complete Year 12, then they've got a great opportunity of being successful in life.

BRIGID DONOVAN: And with the Smith Family's support, their scholarship holders are also continuing
their education beyond the school grounds.

ELAINE HENRY: We've had a jump up from 21 per cent of the kids who made it to Year 12 in 2005 going
to tertiary studies, to over 50 per cent. So we know that what we're doing and what the people of
Australia who are part of the Smith Family in this endeavour are doing, is having an impact. And
then of course Australia gets a greater percentage of its population into the workforce as
productive citizens.

KERRY O'BRIEN: That report from Brigid Donovan.

Paris treasures draw bumper crowds

Paris treasures draw bumper crowds

Broadcast: 01/02/2010

Reporter: Emma Griffiths

The National Gallery in Canberra is currently hosting the most valuable collection of art that's
ever been shown in this country. The priceless collection of Van Goghs, Cézannes, and Gauguins - to
name but a few - is set to become the country's most popular art exhibition ever, too.


KERRY O'BRIEN, PRESENTER: The National Gallery in Canberra is currently hosting the most valuable
collection of art that's ever shown in this country. A facelift at the famed Musee d'Orsay on
Paris' Left Bank has opened the way for the show with the cream of its post-Impressionist paintings
shipped overseas while the renovation work is done, and the priceless collection of Van Goghs,
Cézannes and Gauguins, to name but a few, is set to become the country's most popular art
exhibition ever. Emma Griffiths went to take a look.

RON RADFORD, NGA DIRECTOR: There are so many I love and so many I've known for so long that I never
thought I'd see them all together in Australia.

PATRON: We get to see them without having to go all the way to Paris, although Paris was wonderful
and I'd like to do it again, but it's so easy. And it's just a wonderful idea to use them and not
just put them in the basement.

EMMA GRIFFITHS, REPORTER: What do you think of Van Gogh?

SOPHIE: He's very, very talented.

EMMA GRIFFITHS: You're pretty excited at seeing this.

SOPHIE: Yes, I'm very excited.

EMMA GRIFFITHS: It's a genuine summer blockbuster with all the big names, the million dollar price
tags and a wow factor that's pulling in the crowds.

PATRON II: That's a once-in-a-life opportunity to see this art in Australia.

PATRON III: Most things you only get to see in books or calendars and things like that, so it's
nice to be able see them in person.

PATRON IV: We've been to the Louvre in Paris, but here's a collection of all the French paintings
in one place.

EMMA GRIFFITHS: In the first six weeks, 100,000 people have lined up, sometimes for hours, to see
these masterpieces from Paris, and they just keep coming. Australian attendance records are set to

RON RADFORD: We don't, in Australia, own many post-Impressionist works. There are no major
Gauguins, no major Van Goghs, only three Cezannes, one Cessare, which we own, and unfortunately, we
never will own them, 'cause they are so valuable. It's why this exhibition has been the most
valuable exhibition to come to Australia, 'cause these works bring the highest price, these artists
bring the highest prices, and we'll never be able to afford them in Australia.

EMMA GRIFFITHS: It's an international coup for gallery director Ron Radford.

What did you have to do to convince the Musee d'Orsay that this was the place to exhibit them?

RON RADFORD: I had to sleep with them, bribe them - no, you better ask that again. (Laughs).

EMMA GRIFFITHS: In fact, it took months of hard work and intense lobbying.

RON RADFORD: The Musee d'Orsay in Paris is the greatest collection of post-Impressionism, and the
fact that they're lending for the first time so many of our treasures and to Australia, we're just
very privileged.

EMMA GRIFFITHS: Of the 112 treasures, some have never before left Paris, others are so popular
they're sought-after by galleries around the world and are bound to be familiar to even the most
casual of observers, like The Wall of Van Gogh's.

Eight-year-old Sophie can't believe her young eyes.

How do you think he's feeling?

SOPHIE: Very, very serious. And I think he's trying to get someone and trying to convince someone
into doing what he wants to do.

EMMA GRIFFITHS: This budding art connoisseur first saw Van Gogh's works in books at school, but
she's travelled from the Blue Mountains for the face-to-face experience.

SOPHIE: These are like the flowers that I did, but only we did sun flowers.

EMMA GRIFFITHS: Ron Radford has a first love among the pieces too.

RON RADFORD: I suppose it has to be the Tahitian Women by Gauguin, and I've known that work since I
was 10 years old. It was on the wall of my primary school when I was at the age of 10 in Warrigal
Gippsland, Victoria.

EMMA GRIFFITHS: Each of the paintings is worth millions of dollars, but their cultural value is far
greater. Ron Radford feels the weight of having them in his care.

RON RADFORD: They are great works and they've travelled a great distance from home and we have to
take great care of these great treasures. 'Cause they're not only treasures in the sense of the
Musee d'Orsay, they're treasures of the world, and it's a tremendous responsibility to look after

EMMA GRIFFITHS: Have you taken some special measures for this exhibition?

RON RADFORD: Yes, yes.

EMMA GRIFFITHS: What sort of measures?

RON RADFORD: Well if I tell you, I would have to then kill you, because it's all very private.

EMMA GRIFFITHS: The only possible downside for Ron Radford is that he's set a new bar for
exhibitions in Australia, and eventually he'll have to find some way to top it.

KERRY O'BRIEN: Emma Griffiths with that report.

That's the program for tonight. Join us again same time tomorrow, for now, goodnight.