Mobilising alternative futures: generational accounting and the fiscal politics of ageing in Australia

Abstract

Economists typically argue population ageing generates fiscal pressures by restricting the tax base while increasing demands for social spending. Alongside other economic pressures associated with neoliberalism, this dynamic contributes to a politics of ‘enduring austerity’ that limits governments’ fiscal discretion. The politics of population ageing reflects modelling techniques, such as generational accounting (GA), which, anticipating future deficits, create demands for policy action today to address projected intergenerational inequalities. Taking Australia as a case study, this paper explores the politics of GA in public budgetary processes. While existing critiques reject GA by arguing it relies on ‘apocalyptic’ or unreliable demography, we focus on a different kind of contestation, which applies the techniques and even the categories of GA to frame different problems and promote different solutions. We identify three sites of partisan contest that refocus fiscal modelling: including the tax side of the budget equation; comparing the cost of public provision to public subsidies for private programmes; and including the costs of environmental damage. At each site, the future-orientated logic of GA is mobilised to contest the policy implications of austerity. This complicates analysis that financialisation and neoliberalism necessarily ‘de-politicise’ policy by removing state discretion. Instead, we identify an increasingly important, if technocratic, form of political contestation that offers the possibility to promote more egalitarian responses to population ageing.

From marketisation to self-determination: Contesting state and market through ‘justice reinvestment’

“…These accounting techniques formed the basis of ‘fiscal liability calculation’ which reimagines the welfare state as an ever-increasing set of liabilities (Baker et al, 2020; Baker and Cooper, 2018). These budgetary exercises, such as ‘generational accounting’, tend to justify austerity because they project ever-increasing demographic costs but fix future tax revenues as a proportion of GDP (Spies-Butcher and Stebbing, 2019). They also open up space for marketised responses such as SIBs that intervene to reduce such costs at the individual level.…”