• Jeremy Sammut
• Centre for Independent Studies

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12 September 2008Jeremy Sammut writes that as the proportion of elderly people in Australia doubles over the next forty years, growth in federal health spending will create serious budgetary problems. Without policy adjustments or cuts to services, governments will have to force a smaller base of future generations of taxpayers—today’s Gen X and Gen Y—to pay considerably higher taxes than current generations, to fund health care for the elderly.

Advances in available medical technologies and growth in the aging-driven cost of Medicare will accentuate the massive shift in health resources from people of working age to the elderly.

Politicians already pork-barrel the ‘grey vote,’ and, the expanding elderly constituency can be expected to vote in favour of tax and health spending policies that extract higher transfers from younger workers.
Sammut outlines different ‘health savings’ systems that could potentially avert intergenerational conflict and ease the cost pressures on Medicare.