The last week saw a real game-changer in politics: Joe Hockey smiled for the first time since August.

Yes, the man who went from heir-apparent to most preferred Liberal leader behind, well, everybody else came back to life – and all thanks to the future.

The Intergenerational Report has regenerated the Treasurer and quite possibly the entire Abbott-Hockey project. This report has its problems but all in all it’s a bold statement about the future of this country and what we need to do to secure it.

Unlike a lot of commentators, this writer will just be hitting retirement age when 2055 comes along. The next 40 years is bound to be a joy (not least because of my five volume biography of Prime Minister Kelly O’Dwyer) but there are huge challenges ahead for my generation. Welfare, debt, population growth; the whole thing is destined to blow up in our faces unless we act soon. And at least this government is prepared to sacrifice popularity – boy, are they ever – to pursue a long term agenda for the nation’s future.

This report isn’t flawless. It should have come out before the 2014 Budget, a document often accused of being a solution in search of a problem. And the idea that we’ll have 35 years of sustained budget surpluses from 2019-20 if all the savings pass the Senate is so silly. It looks at face value like Joe’s bit of prophecy has managed to out-Swan Wayne Swan. Those surpluses might evaporate due to great wars or world financial crises or, you know, another Labor government coming to power.

Climate change was spotted somewhere in the executive summary but it wasn’t very prominent. Any changes to the environment (man-made or not) will surely be costly and this report should have dug a bit deeper. But honestly, icecaps and polar bears are not going to disappear because of Hockey’s focus on debt and deficits. There have been climate change reports galore. The Sarah Highly-Strungs of this world can rest assured that the Intergenerational Report will not put a screaming halt to climate action.

It’s Australia’s ageing population (that ticking time bomb of eternal doom), that’s the main game. Girls born yesterday are projected to live till they’re 95.6 years of age, boys 91.5. And for all you lucky so-and-sos who’ll be 60 or 70 in 2055, you’ll also be heading for the big Nine-Oh. This is projected to cost us about $6,600 per person a year in health costs (it’s currently $2,280 per person). And $165 billion in pensions.

I wouldn’t be surprised if the Treasurer in 40 years is found sobbing into her speech on budget night. Medicare, Centrelink and the NDIS are the three witches to the federal budget’s Macbeth and there was nothing to hail in the hereafter they foresaw. Net debt for example is estimated to amount to 57.2 per cent of GDP (or $2,609 billion). No, it’s not 155 per cent like Greece today but our current track from 11 per cent to 60 per cent is hardly something to be proud of.

As barnacles are shaved off, policies killed, buried, cremated – blown into space and denied any sort of reincarnation – this government is developing two narratives which may very well collide and destroy any good they’ve done in the period of resurgence since the spill and the banishing, at least for the moment, of Malcolm or Julie’s spectre.

And frankly, these Intergenerational Reports do strange things to people. Wayne ‘Surplus’ Swan’s response to his 2010 Intergenerational Report was to pursue huge, unfunded projects like the NDIS and Gonski. Peter Costello’s response to his was to introduce massive tax cuts and middle class welfare that’s widely perceived as unsustainable.

With Abbott’s politically motivated retreat on spending cuts, they should be careful not to simply discard this report.

The GP co-payment was a dud as politics but savings do have to be found in Medicare to make it sustainable somehow. And the McClure Review into welfare shows how this government could create a better and fairer welfare system that protects the actual poor and doesn’t burn money in honour of middle-class families who don’t need it.

Pension reforms are apparently still being tinkered with by Scott Morrison. Who knew the Left’s favourite hate-figure, gaoler of children and stopper of boats, could transform so spectacularly? He has walked the line between tough talk and compassion impeccably and is showing much needed guts in this area. There’s still more means-testing needed in pensions though and the family home has to be part of the conversation.

Still behind all this, the Abbott Government has got what it desperately needed – a story.

‘The banks are about to burst but we can fix this,’ is now the mantra of every Coalition MP. Yes, ‘budget emergency’ has disappeared from the cabinet lexicon but that’s half the trouble for this struggling Coalition government. Debts and deficits made up a winning story in Opposition, the voters were convinced it was a problem. Then it fell by the wayside as a resurrected Kevin Rudd scared Abbott into promising things like ‘No cuts to the ABC and SBS…’ Well, no cuts to anything in the end, promises he was bound to (and was obliged to) break.

And this report has a story to tell a Generation Y that this government tends to treat solely as mad Trotskyist dreamers. Most Gen Y voters are in fact heading into work, or starting families, and they want to see a government that can sustain the safety net and rein in the debt. There’s a real chance for a Coalition with a guidebook to the future to actually patch things up with people aged 18 to 29, the supposedly alienated young who they’re losing in droves. After all, we’re the ones who will actually work till we’re 70 now.

As for Labor, well, the ‘year of ideas’ seems to have been put off until 2055. Hockey was a bit cocksure in his handling of this, but Chris ‘What’s the Tax-Free Threshold?’ Bowen had a real chance to turn the tables. By just screaming ‘propaganda’ at the top of their lungs, the Labor Party have the boat on the real issue of long-term spending and revenue.

This Intergenerational Report, for all its faults, offers a path to a more financially secure future for the nation. What’s needed now is a Liberal Party with a stomach for reform and a Labor Party with the grace to admit its mistakes.