![Page 1: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/1.jpg)
Lies, Damned Lies and the 2015 IGR
Richard Lyon & Randy Amidharmo © Richard Lyon & Randy Amidharmo
This presentation has been prepared for the 2016 Financial Services Forum.
The Institute Council wishes it to be understood that opinions put forward
herein are not necessarily those of the Institute and the Council is not responsible for those opinions.
![Page 2: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/2.jpg)
Intergenerational Report • Released at least once every 5 years
• 40-year projections: economic, demographic, fiscal outlook
• Intent: Assesses long-term sustainability of Government policies in the
context of economic & demographic challenges
• 4 reports released so far: 2002, 2007, 2010, 2015
Lies, Damned Lies and the 2015 IGR 2
![Page 3: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/3.jpg)
Agenda • What a Great Idea!
• What can be learned from the 2015 IGR?
• What a Disappointment!
• Calling All Actuaries!
Lies, Damned Lies and the 2015 IGR 3
![Page 4: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/4.jpg)
What a Great Idea! • Periodic review to assess long-term impact of current & proposed
Government policy
• Facilitates a national conversation – shapes how economy & society operate – NHS in UK (1948), Compulsory Superannuation in Australia (1992)
Lies, Damned Lies and the 2015 IGR 4
![Page 5: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/5.jpg)
What a Great Idea! Legislation
Charter of Budget Honesty Act 1998 (Section 21)
An intergenerational report is to assess the long term sustainability of current Government policies over the 40 years following the release of the report, including by taking account of the financial implications of demographic change.
Lies, Damned Lies and the 2015 IGR 5
![Page 6: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/6.jpg)
What a Great Idea! Legislation
Charter of Budget Honesty Act 1998 (Section 21)
An intergenerational report is to assess the long term sustainability of current Government policies over the 40 years following the release of the report, including by taking account of the financial implications of demographic change.
Lies, Damned Lies and the 2015 IGR 6
![Page 7: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/7.jpg)
What a Great Idea! Legislation
Charter of Budget Honesty Act 1998 (Section 21)
An intergenerational report is to assess the long term sustainability of current Government policies over the 40 years following the release of the report, including by taking account of the financial implications of demographic change.
Lies, Damned Lies and the 2015 IGR 7
![Page 8: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/8.jpg)
What a Great Idea! Legislation
Charter of Budget Honesty Act 1998 (Section 21)
An intergenerational report is to assess the long term sustainability of current Government policies over the 40 years following the release of the report, including by taking account of the financial implications of demographic change.
Lies, Damned Lies and the 2015 IGR 8
![Page 9: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/9.jpg)
What a Great Idea! Legislation
Charter of Budget Honesty Act 1998 (Section 21)
An intergenerational report is to assess the long term sustainability of current Government policies over the 40 years following the release of the report, including by taking account of the financial implications of demographic change.
Lies, Damned Lies and the 2015 IGR 9
![Page 10: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/10.jpg)
What a Great Idea! Legislation
Charter of Budget Honesty Act 1998 (Section 21)
An intergenerational report is to assess the long term sustainability of current Government policies over the 40 years following the release of the report, including by taking account of the financial implications of demographic change.
Lies, Damned Lies and the 2015 IGR 10
![Page 11: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/11.jpg)
What can be Learned from the 2015 IGR?
Lies, Damned Lies and the 2015 IGR
11
![Page 12: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/12.jpg)
What can be learned from the 2015 IGR?
Power of Productivity
Lies, Damned Lies and the 2015 IGR 12
![Page 13: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/13.jpg)
What can be learned from the 2015 IGR?
Power of Productivity
Lies, Damned Lies and the 2015 IGR 13
![Page 14: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/14.jpg)
What can be learned from the 2015 IGR?
Growing Output Gap
Lies, Damned Lies and the 2015 IGR 14
![Page 15: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/15.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 15
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2015 Males Females
Analysis based on IGR & ABS
![Page 16: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/16.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 16
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2020 Males Females
Analysis based on IGR & ABS
![Page 17: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/17.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 17
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2025 Males Females
Analysis based on IGR & ABS
![Page 18: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/18.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 18
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2030 Males Females
Analysis based on IGR & ABS
![Page 19: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/19.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 19
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2035 Males Females
Analysis based on IGR & ABS
![Page 20: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/20.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 20
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2040 Males Females
Analysis based on IGR & ABS
![Page 21: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/21.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 21
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2045 Males Females
Analysis based on IGR & ABS
![Page 22: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/22.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 22
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2050 Males Females
Analysis based on IGR & ABS
![Page 23: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/23.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 23
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-4
10-14
20-24
30-34
40-44
50-54
60-64
70-74
80-84
90-94
Population (millions) - 2055 Males Females
Analysis based on IGR & ABS
![Page 24: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/24.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Lies, Damned Lies and the 2015 IGR 24
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-410-1420-2430-3440-4450-5460-6470-7480-8490-94
Population (millions) - 2055 Males Females
Analysis based on IGR & ABS
1.5 1.0 0.5 0.0 0.5 1.0 1.5
0-410-1420-2430-3440-4450-5460-6470-7480-8490-94
Population (millions) - 2015 Males Females
Analysis based on IGR &
![Page 25: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/25.jpg)
What can be learned from the 2015 IGR?
Demographic Outlook
Migration
Lies, Damned Lies and the 2015 IGR 25
![Page 26: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/26.jpg)
What can be learned from the 2015 IGR?
Participation Rates
Lies, Damned Lies and the 2015 IGR 26
![Page 27: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/27.jpg)
What can be learned from the 2015 IGR?
Health Spending
Lies, Damned Lies and the 2015 IGR 27
![Page 28: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/28.jpg)
What a Disappointment! • Unsustainable “sustainability”
• Narrow thinking
• Invisible intergenerational equity
• Household-style budgeting
• Where is the rest of the economy?
Lies, Damned Lies and the 2015 IGR 28
![Page 29: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/29.jpg)
What a Disappointment! Unsustainable “sustainability”
2010 Intergenerational Report (Chapter 6)
Sustainability requires that at least the current level of wellbeing be maintained for future generations. The Government’s policies seek to do more than this. The Government’s goal is to improve the wellbeing of current and future generations. Wellbeing and sustainability are multi-dimensional concepts that go beyond material living standards. In this report wellbeing and sustainability are assessed through the prism of the stock of economic, environmental, human and social resources. [emphasis added]
Lies, Damned Lies and the 2015 IGR 29
![Page 30: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/30.jpg)
What a Disappointment! Unsustainable “sustainability”
2015 IGR Overview (p. 17)
The first two scenarios show a very significant deterioration in the Budget. The third scenario shows that the Government’s current set of policies would bring the Budget back to a sustainable path over the medium to long term. [emphasis added]
Lies, Damned Lies and the 2015 IGR 30
![Page 31: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/31.jpg)
What a Disappointment! Narrow thinking
• Simple, deterministic projection model
• Limited sensitivity analyses
• No feedback loops (formal or informal)
• No scenario testing
Lies, Damned Lies and the 2015 IGR 31
![Page 32: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/32.jpg)
What a Disappointment! Invisible intergenerational equity
• GDP based on hours worked, with no distinction by value – Can’t measure contribution to economy by generation
• Tax revenue a flat percentage of GDP
– Can’t measure contribution to revenue by generation
• “Success” measured by overall budget surplus – Can’t see the position by generation
Lies, Damned Lies and the 2015 IGR 32
![Page 33: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/33.jpg)
What a Disappointment! Household-style budgeting
Lies, Damned Lies and the 2015 IGR
Source: https://www.whitehouse.gov/omb/budget/Historicals (Table 1.2)
33
![Page 34: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/34.jpg)
What a Disappointment! Where is the rest of the economy?
Lies, Damned Lies and the 2015 IGR
Source: AIHW: 25 years of health expenditure in Australia 1989-90 to 2013-14
34
![Page 35: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/35.jpg)
Calling all Actuaries! • The public good
• Build a better mousetrap
• Measure and assess intergenerational equity
• Apply scenario testing
• Get involved
Lies, Damned Lies and the 2015 IGR 35
![Page 36: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/36.jpg)
Calling all Actuaries! The public good
• We helped … to provide for widows, orphans, the sick and the retired
• Profession now engulfed in scandals (e.g. pensions mis-selling and The Equitable in the UK; current major issues in Australia)
• Feeble political debate about Australia’s future Perhaps there has never been a better time for us to remember our
commitment to the public good and to seek to honour it?
Lies, Damned Lies and the 2015 IGR 36
![Page 37: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/37.jpg)
Calling all Actuaries! Build a better mousetrap
• Many opportunities to improve the IGR model, including: – track revenue and expenditure for cohorts – build feedback loops – test with economic cycles – extend to steady state – expand to include other governments and private sector – allow for distribution of income within cohorts
• Very actuarial
Lies, Damned Lies and the 2015 IGR 37
![Page 38: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/38.jpg)
Calling all Actuaries! Measure and assess intergenerational equity
Lies, Damned Lies and the 2015 IGR
Source: http://www.theguardian.com/world/ng-interactive/2016/mar/07/whos-winning-find-out-how-your-income-compares-with-every-other-generation Based on data from Luxembourg Income Study from 1985 to 2010
Disposable income follows a clear trend over a lifetime
38
![Page 39: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/39.jpg)
Calling all Actuaries! Measure and assess intergenerational equity
• Opportunities: – Probability of equity – Some form of
appraisal value approach?
• Intergenerational
Holistic Equity Index
Lies, Damned Lies and the 2015 IGR
Source: http://www.actuaries.digital/2015/08/06/why-future-generations-depend-on-us-rethinking-the-old-age-pension/
39
![Page 40: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/40.jpg)
Calling all Actuaries! Apply scenario testing
• Coherent “real-world” scenarios
• Looking for evidence of flexibility and adaptability
SUSTAINABILITY
Lies, Damned Lies and the 2015 IGR 40
![Page 41: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/41.jpg)
Calling all Actuaries! Get involved
What can YOU do to improve the national conversation on a sustainable
future?
Lies, Damned Lies and the 2015 IGR 41
![Page 42: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/42.jpg)
Supplementary • The proxy model
• Sensitivity analysis
• Age Pension eligibility age
Lies, Damned Lies and the 2015 IGR 42
![Page 43: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/43.jpg)
Supplementary The proxy model
• Population derived from ABS projections
• Participation rates derived from IGR
• Productivity from IGR
• Calibration to fit
Lies, Damned Lies and the 2015 IGR 43
![Page 44: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/44.jpg)
Supplementary The proxy model
Lies, Damned Lies and the 2015 IGR
Close fit to the IGR after calibration:
44
![Page 45: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/45.jpg)
Supplementary The proxy model
• Revenue % GDP as per IGR
• Expenditure % GDP as per IGR – split into demographic & non-demographic components
• Applied adjustments as required for sensitivity testing
– e.g. High/Low longevity modelled by calibrating population adjustments
Lies, Damned Lies and the 2015 IGR 45
![Page 46: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/46.jpg)
Supplementary The proxy model
Lies, Damned Lies and the 2015 IGR
Expenditure fits IGR by definition – resultant Budget Surplus is close
46
![Page 47: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/47.jpg)
Supplementary Sensitivity analysis
Lies, Damned Lies and the 2015 IGR
Lower longevity or higher migration would reduce expenditure as % GDP
47
![Page 48: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/48.jpg)
Supplementary Sensitivity analysis
Lies, Damned Lies and the 2015 IGR
Fertility has little effect, but productivity is very significant
48
![Page 49: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/49.jpg)
Supplementary Age Pension eligibility age
49 Lies, Damned Lies and the 2015 IGR
Eligibility age increases constrain demographic growth in pensions cost up to 2035
![Page 50: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/50.jpg)
Supplementary Age Pension eligibility age
50 Lies, Damned Lies and the 2015 IGR
Continuing increases in eligibility age would constrain pensions costs up to 2055
![Page 51: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/51.jpg)
Supplementary Age Pension eligibility age
Lies, Damned Lies and the 2015 IGR
Continuing increases in eligibility age would constrain pensions costs up to 2055
51
![Page 52: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/52.jpg)
Supplementary Age Pension eligibility age
Lies, Damned Lies and the 2015 IGR
Continuing increases in eligibility age would deliver clear savings to the budget
52
![Page 53: Lies, Damned Lies and the 2015 IGR · 80-84. 90-94. Population (millions) - 2015 . Males. Females. Analysis based on IGR & ABS . ... Lies, Damned Lies and the 2015 IGR 29 . What a](https://reader034.vdocuments.net/reader034/viewer/2022050400/5f7dabc6f61de2350c315358/html5/thumbnails/53.jpg)
Supplementary Age Pension adjustments
53 Lies, Damned Lies and the 2015 IGR
We can play with Eligibility Age, long-term indexation rate and old-age participation rates: