<i>Illustration: Simon Bosch</i>

Illustration: Simon Bosch

As smackdowns go, this one was elegant, kind and firm. The dean of the Sydney University law school, Joellen Riley, faced with students disgruntled over a corporations law exam interrupted by a fire alarm, told her mostly 20-something charges to deal with it and move on.

The exam, held on November 12, formed 100 per cent of that year's mark for the subject. The stakes were high. Law students are a notoriously competitive bunch, and generally prepare for exams with great diligence.

Riley used her best judgment and told the students to wear it. 

When the test was interrupted, the students were evacuated, and when they returned to the examination room to complete the test, they were told they would ''probably'' have to re-sit the exam, and as a consequence many didn't take it very seriously. But they were later told the results of the interrupted exam would stand after all.

University students sitting an exam.

University students sitting an exam. Photo: Rob Young

Some cried foul. Shadowy rumours of cheating circulated, with students saying they saw others conferring on exam questions during the evacuation period. Some students demanded everyone re-sit the test.

Professor Riley was unmoved. The episode would only become a tragedy if students let it poison their law school experience, she wrote in an open letter to students. ''Treat it as a life lesson. Stuff does happen. Stuff will keep happening. All the things you are learning at law school will help you navigate a life full of some pretty awful stuff if you are going to be a lawyer,'' she counselled. ''You do need to be a bit kind to yourself, and to others.''

It was a marvellous letter. Here, finally, was an educator breaking ranks with the ''every kid must win a prize'' mentality which seems to govern the contemporary approach to learning. Here was a teacher who quibbled with her students' myopic focus on marks, and made the point that ''a couple of years post-graduation and they will learn that the marks in any one exam are soon forgotten''. Here was a teacher who told her students, respectfully, to take themselves a little less seriously. Instead of trying to insulate them from all knocks, she gave sound advice on how to deal with adversity.

Of course, as any good law student knows, the rule of law has to be consistent - consequences cannot be imposed retrospectively. On a strictly legalistic interpretation of the problem, all 450 students probably should have been made to re-sit the exam.

But Professor Riley lives in the real world, where legalism and the strictures of protocol have to bend to other considerations. Is it fair to make all the students re-sit the exam for the high-voiced complaints of a few? What about students who have travel and work plans over the summer? What about the students who did treat the exam seriously, even if they thought it might not end up counting?

Professor Riley used her best judgment and told the students to wear it.

Anxiety over tests is to be expected, of course. This week a report by the Whitlam Institute found that 40 per cent of parents recognised signs of stress or anxiety in their child as a result of the NAPLAN test, the annual literacy and numeracy exam for years 3, 5, 7 and 9, which was introduced by the former Labor government. Interestingly, the second-most common stress symptom was ''fear of parental reaction'', which suggests the parents are just as results-conscious as the kids.

Should we be shielding children and young adults from all stresses and shocks? While the benefits of positive encouragement and praise are well documented, the cult of self-esteem has been shown to have its flipside. Research shows that children who are over-praised don't try as hard at school. They have higher opinions of themselves, but those opinions might not be grounded in reality, which leads to adjustment problems when life inevitably doles out its disappointments.

There is another problem with children being raised to believe they can do anything, and have all problems resolved for them by their parents and teachers. Namely, it is increasingly clear that the Australian economy is not going to be able to keep them in the manner to which they have become accustomed.

Three reports out this week gave a glimpse into the kind of Australia that today's young people will grow old in. A Grattan Institute report by John Daley found if we sail on current settings, future governments risk accruing a deficit of 4 per cent of gross domestic product, or $60 billion in today's terms.

''Tough choices cannot be put off indefinitely,'' Daley advises.

''Deficits impose heavy costs on the next generation in terms of debt and high interest payments.''

Daley notes the big expenditure items the Coalition government has pledged, but says if we want to spend on these things, we must cut elsewhere, or raise further revenue.

He suggests several structural reforms, including a widening of the GST, limiting tax concessions on superannuation deposits, and defence or health budget cuts.

But the most controversial - and he says, the most effective - deficit-buster would be lifting to 70 the age people can get the pension and their superannuation.

''Middle-class welfare to those over 60 is alive and well,'' Daley told me.

''Tax and welfare is skewed towards the old. People who are older pay less tax per dollar of income they earn.''

A Productivity Commission report released in the last week made the same proposal - that the pension age should be increased to 70. It was met with howls of outrage and the government quickly dismissed the idea.

The third piece of startling news came from the Australian Bureau of Statistics, which projected that Australia's population is set to double by 2075, with the percentage of elderly people growing. Population growth generally equals economic growth, but it also places great pressure on services and infrastructure.

The ageing population means the power of political pressure lies with the oldies - not to mention the powerful superannuation lobby, which wants all the tax breaks it can get.

That puts the onus on politicians and other contemporary adults to make difficult decisions now. Or stuff will happen, a lot of it bad, to future generations.

Perhaps the best thing elders can do for their children is not boost their self-esteem or ease their everyday stresses, but to give up their own tax breaks and super lurks.