Intergenerational Report: Time to spend less and work smarter

Former treasurer Joe Hockey, left, and former finance minister Mathias Cormann catch up in Paris over the weekend

If you want to really annoy gen Xers Scott Morrison and Josh ­Frydenberg, remind them they’re not in the same policy class as the fab four of the reform era: Hawke, Keating, Howard and Costello.

Same goes for boomer ­Anthony Albanese & Co. as well as the godfathers of the 2015 Intergenerational Report, Joe Hockey and Mathias Cormann, who cheekily put political fizz into Treasury’s long-range projections.

The authors of the 2014 “horror” budget, forever close and waving fat post-fiscal cigars, had another jolly moment of special time in Paris, chugging a clever white as the Treasurer contemplates laying down some deep red for the next 40 years.

The party is over, but who will do the clean-up?

One-time productivity tsar Gary Banks nailed it a few weeks ago when he called out the timidity of today’s fixers.

“Former treasurer Peter Costello has reportedly observed ‘you cannot lead reform if you don’t ­believe in it’,” Banks told a Minerals Council conference this month.

Martin Parkinson went further a week later, telling this newspaper the political class had been idle on reform during the past decade.

“Complex challenges can still be tackled, if properly explained,” the nation’s former top bureaucrat said. “But that takes courage and a vision for our society. What it doesn’t ­involve is a focus on short-term ­political advantage at every turn.”

Treasury’s Intergenerational Report may not be as candid or punchy as these two seasoned economists. But if we’re going to stay rich before we get really old, today’s politicians will have to stop talking and texting and tweeting – and using the pandemic as cover for their insipid operating methods.

The IGR is not only an opportunity to educate the public about the low road we’re on – smaller, older, slower and less dynamic – it should be a moment for Morrison and Albanese to reset the future of the newborns and toddlers they will soon be striking poses with on the campaign trail.

Kids, you’re probably going to live to 90 or 100, but you’ll have to work harder for longer for less than those who came before you and supped at the stimulus and subsidy hot and cold buffet.

The IGR is a grim horizon of sorts, yet one that we must try to avoid, and seek out a better place. Here comes the boring part: stop spending large and start working smart. That’s it.

This is a productivity story and like most of the rich world our ­living standards have taken a pause and are going to be constricted, partly because of the debt overhang of Covid, but mostly ­because our wealth-creating system has not adapted to a world of tech oligarchies, pre-eminence of capital and low returns to workers.

The Treasurer’s lament of the “big-bang” stuff like floating the dollar, reducing tariffs, competition policy, taxation reform and ­deregulating the financial system as one-offs and behind us is true, but beside the point.

Incremental is the new ‘wow’ and we must take every productivity crumb that is offered. You can be sure Frydenberg won’t be shy in drawing our attention to his small-is-beautiful reform catalogue.

But if you’re trying to play that game you’re going to have to be ­focused, busy, and unstoppable. Creative and courageous, too.

It helps to have an ambitious partner on the other side of the aisle and not a sidecar coalition passenger who controls the handbrake, refuses to pay the tolls and can’t see through dirty, vintage goggles.