You are right to mention Inflation in terms of the CPI. What about Inflation of health costs from the ageing population problem?
Even with immigration, we will have a lower ratio of taxpayers to pensioners/medicare users. Medical technology continues to improve, but service standards will decline with tax revenues. Health services will be first on the chopping block.
Is anyone factoring this into their Super plan?
Here's my nightmare scenario, for your enjoyment:
Tax revenues continue to decline, partly because businesses won't tolerate Australia's ridiculous tax rates, partly because the bulk of the population gets older and works less. Medicare demand increases exponentially with the ageing population. Pension demands, likewise. The Commonwealth government of the day has two options: raise taxes, accelerating the exodus of productive people and businesses, or lower pensions and healthcare. The government of the day goes for a compromise: it nationalises Superannuation and lowers every retiree's living standard. They also cut medicare instead of raising taxes. "We'll take care of you," the Commonwealth annouces, and promptly shafts everyone.
