SADLY, most voters are not prepared to accept the tough medicine that is needed to get the country's finances back on track.

But, the longer we put off making the changes, the harder it's going to be when drastic action is forced upon us.

Today, there are 3.45 million Australians aged 65 and over. By 2034, just 19 years away the number is expected to be 6.1 million - almost 20% of the projected population of 31.6 million.

In a situation where debt has become the norm, and deficits are forecast for years ahead, how is a government going to find the funds to provide the health services and age pension to deal with all those ageing people.

Our current income tax system is unsustainable. The 65's and over are our fastest growing group, yet 87% of them pay no income tax at all. The Seniors and Pensioners Tax Offset (SAPTO) enables a couple to earn $28.974 each per annum without paying tax, while anybody over 60 can hold their superannuation in a tax free fund while drawing a tax free income from it.

Raising the taxes on super without cutting back SAPTO won't work because retirees with less than a million dollars in super would simply exit the system and continue to enjoy a tax free existence. The only realistic option available is to widen the GST so there are no exemptions.

Most senior citizens expect at least a part age pension. Currently, increases are linked to average weekly earnings, but the Coalition is trying to stem the rate the pension goes up. They have proposed the rate of increase be linked to cost of living from September 2017.

Let's assume average weekly earnings are 4% per annum, inflation is 2.5%, and the couple's full pension now is $30,000 a year. If it remains linked to earnings the pension would rise to $45,000 a year in 10 years and $67,000 a year in 20 years. By linking it to the CPI it becomes $38,000 a year in 10 years and $49,000 in 20.

Surely it is a no-brainer to reduce the increase in the age pension so that it keeps pace with the cost of living.

Put all this together and you have an ageing population, all who vote, who will be a growing drain on government finances at the same time as the government is shackled by a tax system which cannot cope. Eventually, something's got to give.

Noel Whittaker is the author of Making Money Made Simple, and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: noelwhit@gmail.com.