The 2002 Intergenerational Report, released with the 2002-03 Budget, influenced policy and commentary for months. The 2007 Intergenerational Report, released by the Treasurer last week, dropped out of sight in a matter of days. It was not just that it was overshadowed by a leaked speech from the Treasury Secretary later that week — even on release, much of the commentary on IG2 was at best dismissive.

Yet, by comparison with the 2002 report, the latest version is a vast improvement.

IG1 was obsessive and overly alarmist about the costs of ageing and its associated health care costs (more nuanced in the attachments, but few people read that far). IG2 arguably still concentrates too much on health and ageing, but it also covers education (building human capital is vital for future generations), infrastructure (briefly) and climate change; its commentary is more balanced and thorough.

Instead of being welcomed as a step upwards, however, this report was widely criticised. What is going on here?

The reaction to the 2007 report is a marker of a more fundamental change in the political debate. The measure of government performance is shifting. That IG2 is better than IG1 — but still not good enough — is in microcosm an indicator of the bigger change. Increasingly, it is not enough for a government to show things are better than they used to be — the measure now is whether they are as good as they ought to be.

Global warming is the key driver of the shift. By any quantitative measure, we have more programs in place today to reduce carbon emissions than we did a decade ago. Better than we used to be, no doubt. But nowhere near as effective as we ought to be. The imperative is to march into the territory of what should be done — small changes do not meet the public sense of urgency about the problem.

In areas such as tax and interest rates, the Government hammers the point that we are better off now than we used to be. Incremental tax or welfare changes, even if planned for the future, remain stuck in the “used to be” territory.

Instead, debate has moved into the “ought to be” territory — which is home ground for an opposition. It is hard for a government to prove that it is as good as it ought to be: measures of progress over the last decade do not work; nor does more spending on existing programs. The Government will be desperate to change the terms of the debate in the May Budget — or risk looking increasingly irrelevant against the new yardsticks of performance.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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