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REIQ Journal : March 2010
The Federal Government's Australia to 2050: Future Challenges report shows that population ageing and escalating pressures on our health system will put major pressures on the Federal Budget over the next 40 years. Population ageing will place greater demands on government services while escalating health costs, driven by better technology and demands for higher quality health services over longer life spans, will add to these pressures. Taking modest steps today to manage these pressures will avoid the need for much larger and more painful adjustments to the budget in the future. Ageing and health pressures are projected to result in an increase in total government spending from 22.4 per cent of Gross Domestic Product (GDP) in 2010 to 27.0 per cent of GDP by 2049-50. Rising health costs are by far the biggest contributor to these growing scal pressures, accounting for more than two-thirds of the projected increase in spending. At the same time, a slower rate of economic growth associated with an ageing population will reduce the capacity of Australia to fund these increased costs. As a consequence, spending is projected to exceed revenue by 2.75 per cent of GDP in 2049-50. If further steps were not taken to close this scal gap over time, the budget would be in de cit by 3.75 per cent of GDP in 2049-50 and net debt would grow to around 20 per cent of GDP. The scal pressures outlined in the report add to a structural spending base which has already expanded signi cantly over the past decade, increasing the size of the adjustments required. Real growth in total government spending over the 2000's exceeded the spending growth experienced in any previous expansion. This locked-in permanent increase in spending, compounding the scal pressures of an ageing population. The Government's scal strategy will play a key role in meeting the scal challenges of an ageing population. Implementing this scal strategy will result in a permanent structural improvement in spending of around 1 per cent of GDP and help place the budget on more sustainable footing. This is a signi cant rst step in delivering the structural adjustments needed to ensure long-term scal sustainability. Intergenerational report highlights fiscal pressures Review of budget accommodation regime Emergency Services Minister Neil Roberts said the Bligh Government will review the current working arrangements for the inspection and enforcement regime for budget accommodation. "Over the three years between 1 January 2007 and 1 February 2010, the Queensland Fire and Rescue Service inspected 770 newly identi ed and unregistered student and backpacker accommodation buildings," Mr Roberts said. "Of these, 356 were issued with 'Section 69 Requisitions' to reduce occupancy numbers to below six persons until the building complies with the re safety standards. "There were 139 buildings issued with 'Section 104G Notices' to upgrade existing re safety systems to comply with the safety standard. "It is obvious that a number of operators are not taking these laws seriously. They are putting pro t before the safety of their tenants." Mr Roberts said many Queenslanders would recall the terrible tragedy at the Palace Backpackers Hostel in Childers on 23 June 2000 which claimed the lives of 15 people. "No one wants to see a repeat of this tragedy, that's why we need to ensure our current laws and our inspection regime send a clear message to unscrupulous operators that unsafe premises will not be tolerated," Mr Roberts said. "This departmental review will focus on the current working arrangements for the inspection and enforcement regime for budget accommodation. "Representatives from the departments of Infrastructure and Planning and Communities, and the Local Government Association will be invited to participate along with representatives from local councils." The terms of reference for the review include: An assessment of the current process for identifying unregistered budget accommodation; Identi cation of potential additional strategies for identifying unregistered budget accommodation; and Assessment of the adequacy of the current enforcement and penalty regime. Mr Roberts said Queensland already had some of the toughest budget accommodation legislation in Australia. REIQ Journal March 2010 INDUSTRY NEWS 3