Treasury boss urges G20 to address aging population crisis
AUSTRALIA is not alone in facing sharp growth in health and "social safety nets" costs, the head of the federal Treasury argued this week.
In a speech on Thursday night, Treasury secretary Dr Martin Parkinson urged the G20 meeting to seriously consider the effects of ageing populations across the globe.
He said that it was an issue Australia had stressed when it last hosted the G20 six years, and the situation was only getting harder.
"As their population ages, the dependency ratio - that is, the ratio of people requiring support relative to the working-age population - will increase to previously unexperienced levels in most of these countries," he said.
"This changing demographic structure will also have a dampening effect on future potential growth.
"The extensive social safety nets in place in most advanced economies are costly to run and costs are projected to increase rapidly over the coming decades."
Dr Parkinson hardened his earlier calls to clamp down on government spending in Australia and abroad. He said in the "absence of corrective measures", governments would see "growing pressure on public finances".
In what could be seen as an inference to the domestic debate on Treasurer Joe Hockey's budget, Dr Parkinson also said he wanted to "let leaders be leaders".
"As the full impact of these challenges will not be felt for another decade or so, responding to them requires a high degree of political maturity and the right incentive structure," he said.