Treasurer Josh Frydenberg (Image: ABC)

While today’s Intergenerational Report (IGR) will be treated with due reverence by the media and considered as a thoughtful contribution to long-term fiscal and economic debate, does it have any point whatsoever?

The reports, since the first one in 2002, have shared Treasury’s long tradition of spectacular misses in forecasts. The department that routinely struggles to get four-year forecasts right, it turns out, isn’t any better with twenty- and fifty-year forecasts.

The 2002 report confidently predicted Australia’s population would be 23.2 million in 2022, and it would reach a staggering 25.3 million in the early 2040s. It’s now around 25.7 million, an impressive 20-year miss by Peter Costello’s Treasury.

The 2015 report suggested that, even without the legislation of the Abbott government’s “zombie measures”, the budget deficit would have shrunk to negligible proportions by now before increasing to 6% of GDP in the 2050s, taking net debt slowly from below 20% of GDP to nearly 50% in the 2050s. Instead the deficit is 7.8% of GDP this year and 5% next year and net debt is headed over 40% by 2025. Today’s report predicts net debt will never fall below 28% on current projections.

That is, it’s easy to get forecasts wrong when an external catastrophe like a pandemic hits, but it’s also easy to get forecasts wrong when you directly control a key input like migration.

But we all know forecasting’s a mug’s game. Problem is, politicians — and it’s the Coalition that has been in office for all but one of the IGRs — behave like they don’t believe the forecasts either.

Despite the 2002 IGR predicting the budget would plunge into deficit in 2017 without remedial action — bearing in mind the entire point of the IGR is a long-term view of fiscal sustainability — Peter Costello still permanently undermined revenue. He handed out a bonanza of superannuation tax concessions costing the budget billions in the years ahead — just like he’d handed out a franking credits bonanza to wealthy retirees in 2000 — and made permanent cuts to income tax rates during a temporary boom.

Nor did it stop John Howard from desperately trying to buy the 2007 election, so much so that Costello himself lamented the profligacy of his last days in office.

Nor did the IGR emphasis on the importance of productivity prevent Howard and Costello from introducing Workchoices, which Treasury warned the government would lead to lower labour productivity.

And the 2015 report showing a slow but permanent increase in deficits from 2021 didn’t encourage the Turnbull and Morrison governments from seeking to slash corporate tax rates for their biggest donors — which would have ripped tens of billions of dollars out of revenue — nor of demonising Labor’s proposals to end costly tax distortions like the franking credits scam or negative gearing of existing properties. Nor did it inspire those governments to do anything about Australia’s plummeting productivity growth levels. In fact, when it comes to heeding the IGRs or doing what’s political convenient, political convenience wins every single time.

In contrast, Wayne Swan, who lifted the retirement age and tried hard to curb unsustainable middle class welfare, copped nothing but grief for his efforts to implement the goals of IGRs while Treasurer.

But the Coalition has faithfully implemented two aspects of the IGR agenda of productivity, participation and population.

It has managed to lift workforce participation, by significantly increasing female participation. The 2002 IGR assumed participation would never get above 64% before declining from 2008; even the 2015 IGR predicted it would never top 65%; it’s currently back over 66% and today’s report projects that despite the ageing population it will remain above 63% into the 2060s. That’s because so much additional state and federal funding has entered the health and social care sector, traditionally heavily dominated by women.

Indeed, you could argue not that increased participation is a necessary response to an ageing population, but that an ageing population has driven increased participation through political pressure for more funding.

The other area where the IGR agenda has been faithfully implemented is in population, until borders were snapped shut last year. The Howard, Abbott, Turnbull and Morrison governments were all high migration governments, and particularly liked high temporary migration through temporary work visas and foreign students.

That was an important source of downward pressure on wages in recent years, as employers preferred to bring in cheaper, and more easily exploited, labour from overseas than increase wages to attract Australian workers. This continues to be the case, with the government expanding the range of temporary work visas it will allow once borders reopen and promising one of the country’s most exploitive industries, horticulture, it will have an entirely new and easily exploitable workforce from ASEAN countries.

Wage stagnation was completely missing from the 2015 IGR and it’s completely missing from today’s report released by Josh Frydenberg. Both blithely project wages growth of 4% a year — when wages haven’t grown that quickly since before the previous IGR in 2010 and at that stage were below 3% a year. That wages growth forecast is there despite assumptions that our migration-fuelled population growth will resume post-pandemic, even if not quite at the fast clip of the 2015 report, with our population reaching nearly 39 million in the 2060s.

Looked at it another way, the Coalition has always been happy to pursue the goals of the IGRs, or to entirely ignore the goals of the IGR, and instead pursued its own political interests or the financial interests of its major donors and employer groups.

If the point of the IGR is an informed debate about fiscal sustainability in the face of an ageing population, that’s all very well. But it should be treated as an academic paper that will gather dust on Canberra shelves, not a meaningful contribution to public policy debate.