the need for increased resources per student to generate a workforce to sustain the increasing complexity, diversity and technological demands of society;
•	reduced scale economies in the long run as the proportion of school aged persons in many communities declines (which can be only partially countered by rationalisation of facilities);
•	higher costs per student for State governments due to the drift towards the private sector, reflecting:
•	remaining government students are more likely to have learning difficulties and come from low socio‑economic backgrounds; and
•	reduced scale economies for remaining government students;
•	pressure to increase resourcing for government schools to retain quality students in the government sector and reduce the drift to the private sector.  The need to better compete with private schools is emphasised by the statistics in the draft report showing that  growth in government funding for government schools has significantly lagged that for non‑government schools.
Social Concessions
The Western Australian Government provides social concessions in the form of rebates, discounts and waivers to improve affordability of key services.  In 2002‑03, the State Government provided social concessions with an estimated value of around $387 million or around 0.5% of gross State product.  Given that eligibility for these concessions is often based on age, demographic change could have a significant impact on the value of these concessions over the long term.  
In most studies on ageing, the impact of these concessions is not separately identified, but is captured through escalating portfolio expenditure or revenue values that exclude foregone revenue.  While the draft report does make reference to certain concessions (e.g. transport and local government concessions), it does not provide an assessment of the impact of ageing on aggregate concessions.  As such, we would welcome any quantitative assessment of the impact of demographic change on these concessions.
Law and Order
The Commission has assumed expenditure growth in line with GDP, reflecting offsetting effects from the declining proportion of younger people, and rising expectations on community safety.
Contrary to this view, our practitioners in the area consider that expenditure pressures will increase, reflecting factors including:
•	increased opportunities for crime in a mobile and technologically advanced world;
•	increasing threats from terrorism and the manufacture and importation of illicit drugs;
•	increased crime complexity, again related to technology (e.g. fraud, identity crime);
•	increased sophistication in crime detection and prevention methods;
•	increased income inequality and loosening family ties;
•	the need  to improve law and order services in remote areas of Australia (e.g. indigenous communities);  and
•	increased urbanisation.
We hope these comments are of some assistance, and look forward to reading the final edition of the Commission’s report in March 2005. 
Yours sincerely

COLIN MURPHY
Acting Under treasurer
22 February 2005