Because of the resources boom, one that may already have peaked, Australia is living through a period of great prosperity that should be harnessed to ensure a stable future.

Mr Keating told the Australian Superannuation Funds Association that 3 per cent of workers’ wages should be set aside in much the same way that 9 per cent is now taken by the superannuation guarantee levy.

The funds would be channelled to cover what he described as ‘the second phase of retirement’, a period when many self-funded retirement plans have dried up and people living on a pension require considerable aged-case assistance. Care the government will have to pay for.

“We built something that took people from 55 to 75,” said Mr Keating. However people are now living longer and the government will need to care for those living well into their 80’s and 90’s.

Treasury secretary Martin Parkinson noted that Australia’s population aged 65 and over will grow from 13.5% today, to nearly 23% by 2050.

Mr Keating’s aged-care proposals are unlikely to be taken seriously in Canberra.