The age pension is the government's most expensive payment. Generously benchmarked to 25 per cent of male total average earnings, accessed at least in part by most retirees, and set to balloon as the retired population grows it was to climb from 2.7 per cent of the total value of Australian production to 3.9 per cent by the middle of the century. Spending on health was set to triple.
After this year's budget the head of the Treasury, secretary Martin Parkinson, set out the problem starkly.
''We have a big gap between what the community demands of government and what it is prepared to pay,'' he told business economists. ''We have to think about savings, or new sources of revenue.''
The 1996 commission of audit was onto the problem early. Its report will be the first place Abbott's commission looks.
One of its simplest suggestions was to stop increasing the pension. It is traditionally lifted twice each year by either enough to keep it at the male earnings benchmark or by the increase in consumer prices, whichever is the greater. Instead, the commission suggested adjusting it only from time to time after reviews that would have to consider ''all relevant circumstances, including budget pressures''.
The states would need more money. The 1996 commission of audit didn't say much about where they would get it from but events since provide a ready-made solution. The states have since been given the GST. They could lift it. It would be tempting to think Tony Abbott wouldn't necessarily welcome such a radical set of prescriptions. But it would be dead wrong.
When announcing plans for his commission of audit last March he specifically charged it with examining questions such as ''whether the federal health department really needs all 6000 of its current staff when the Commonwealth doesn't actually run a single hospital''. He knows what it will examine and he must know what it is likely to recommend. He is preparing to consider bold options.
I don't usually get political on the blog but these snippets from an article in the Age yesterday rang up a red flag. We had to fight damn hard to get aged people something decent to live on and it's not exactly enough to go around the utilities costs these days.
We should be looking at this very carefully. If pensioners start turning off the heating because they can't afford it then look at the spending on health, it won't just triple when older people start arriving at hospitals with all types of winter ills. And they'll go to hospitals because they won't be able to afford a doctor unless he bulk bills and they're becoming harder to find these days.
I just spend an enormous amount of money on food for one person less the cat and bird food. But by the time it's divided up, cooked, packaged and in the freezer, I'll only need to buy vegetables for the next six weeks or so. I would say my one extravagance is to buy microwave brown rice but 90 seconds in the microwave as against the time on top of the stove or the rice cooker plus the hot water to wash everything up and I think it evens out.
My other indulgence, Rose's raspberry and rhubarb jam, on special, delicious and I haven't seen it for ages. No booze, no cigarettes. I don't know how people manage if they're buying those.
This article should have been in bold type on the front page but if it happens then we'll have to mobilize "Grey Power", after all it seems there are a lot of us just hanging around enjoying free money.