An Analysis of the Debate on Intergenerational Equity and Fiscal Sustainability in Australia

The authorities in a number of advanced countries have produced intergenerational reports that seek to determine the fiscal sustainability of current policy parameters. The Australian government will publish its Intergenerational Report in May 2002. This paper attempts to place these reports in analytical perspective. We examine the notion of intergenerational equity, the conceptual basis for generational accounting, Australian efforts at constructing generational accounts, and then review the intergenerational reports of several other countries. The paper concludes with a brief synoptic discussion of various policies that can help Australian governments achieve intergenerational balance in future.