Here’s a radical thought: what if Australia’s ageing population was a boon not a burden? What if greying baby boomers spelt opportunity not crisis? The media, politicians, and Treasury have depicted the ageing population as a demographic time bomb. Too many old people and a shrinking workforce will be the country’s ruination. As the politically powerful and needy old squeeze the young dry, the result will be endless government deficits, higher taxes and lower productivity. It’s enough to make retiring baby boomers feel guilty for hoping to reach 80.
But increasingly other voices are pressing a positive view. Instead of fearing longer lives, we should be celebrating the longevity achievement as one of the greatest of modern times. Instead of regarding ageing as a period of decline, decay and dependency, we should positively embrace the ageing society. The Blueprint for an Ageing Australia is a recent report to argue this line. It says we debate the ‘challenges’ of an ageing population “as though ageing was something to be feared and shunned. We talk about the costs and burdens of ageing. This perception is misguided.” Instead, it says, we could “choose to see longer lives as a social and economic good.”
I’ve taken a while to be persuaded to this positive point of view. The growing costs of aged care, superannuation tax concessions, pensions, and especially health care are realand need to be addressed. The cost of treating dementia alone is estimated to be $83 billion by 2060. The growing inequality among older Australians is another cause of concern.
When the number of people over 65 rises from 3.1 million to 5.7 million over the 20 years to 2031 it will represent a significant shift. Australians over 65 will make up 18.7 per cent of our population compared to around 14 per cent today. The ageing population is a force that will re-shape Australia. And the wealthier elderly may have to accept some loss of government benefits in the name of fairness and revenue-raising.
But do we have to scared, very scared of this eventuality? Do we have to ring the alarm bells, and raise the pension age to 70? An ageing society creates opportunities. It’s not all about costs. And it’s time we framed the debate about the future in a more positive way. “The best way to approach it is to look for ways that older Australians can participate more effectively in our society and our economy to the best of their abilities,” the Blueprint says.
Let’s have a look at some of the opportunities. Business opportunities abound. If entrepreneurs took off their blinkers, they would see the over-60s not as an unfashionable demographic but a desirable one. It’s no secret older people have spending power. Baby boomers spend a lot on travel, recreation and culture. If you’re not rich enough to bankroll your adult children into housing, you might as well pamper yourself. The age group 50-69 alone holds more than 40 per cent of the nation’s wealth. It’s a market segment crying out for entrepreneurial attention. From dating websites, to longevity insurance, from IT products to toothpaste that promises healthy gums, and reverse parking systems that help drivers with bad necks, the possibilities are endless. It’s not just about incontinence pads, and devices of the “I’ve-fallen-and-can’t-get-up” variety that are needed. That’s the old business of old age. The new business involves technologies that promote mobility, autonomy and social connection.
Another area of opportunity is philanthropy. Many older people have considerable capacity to give more, and giving tends to increase with age. They should be assisted and encouraged to do so. “Giving provides a great way for older Australians to demonstrate that ageing isn’t a cost to society,” the Blueprint says. It recommends banks launch a “golden givers” campaign to encourage older clients to establish charitable trusts and foundations while offering services to manage the funds.
Other Australian voices also argue for a more positive approach. Patricia Edgar, author of In Praise of Ageing, says the productivity of older people is written out of the country’s GDP because we don’t include the value of the caring, voluntary and creative work they do. In this way the “dependence” of older people is exaggerated, and their economic contribution downplayed. “Our assumptions about the burden of the aged, the dependency ratio and the future workforce are riven with inaccuracy,” she says.
The Age Discrimination Commissioner, Susan Ryan, urges against “scrabbling round for a few sticks to beat our older citizens with.” At the same time she’s clear-eyed about the changes needed to embrace an ageing society. In her recent address to the National Press Club, titled Longevity Revolution – Crisis or Opportunity, she highlights the need for older people to stay in the workforce longer for their sake and the country’s. A further three per cent increase in workforce participation amongst workers aged 55 and over would contribute an extra $33 billion to the nation’s GDP – a sum to gladden the hearts of Treasurers, and young taxpayers alike.
But raising the pension age won’t achieve this. It will require a different mindset towards older workers, more flexible workplaces, an end to ageism, and more help for mid-career workers to plan for the long-term. The debate about the ageing society has used too many scare tactics. To embrace the opportunities we need a positive agenda: how can we best harness the talents, money, and willingness to work of older Australians without making them feel guilty for being alive?
Source: Adele Horin: Coming of Age
The Australian economy continues to be underpinned by strong population growth, but the data also highlights the increasing divergence between the Australian states.
Population growth remains weak in both South Australia and Tasmania, with both states struggling to attract immigration and capital investment.
The Australian population rose by 1.7 per cent over the year to the March quarter – reflecting strong growth on the east coast – and will continue to underpin real GDP growth for the foreseeable future. Nevertheless, population growth has begun to slow over the past few quarters.
New South Wales and Victoria continue to lead the way, with their populations rising by 1.6 per cent and 1.9 per cent, respectively, over the past year. The population in NSW sits at 7.5 million, and in Victoria at 5.8 million.
But the strongest growth remains in Western Australia. The mining boom might be over, and former mining towns have now become ghost towns, but their populations continues to rise at a rapid pace.
The population in WA rose by 2.5 per cent over the year to the March quarter. This is well down on its peak during the mining boom – 3.7 per cent growth over the year to September 2012 – but it remains rapid in every sense of the word.
Population growth reflects a number of factors. Economic opportunity can explain a great deal of WA’s growth; the mining boom made the state a particularly attractive destination for not only immigrants but those living interstate.
For NSW and Victoria it is a combination of the nation’s pursuit of high immigration combined with the appeal of big city living. Queensland, to a lesser extent, benefits from this but also from the mining boom and intangibles such as their tropical climate.
At the other end of the spectrum we have states where opportunities have been poor. Population growth in South Australia and Tasmania have been remarkably soft given Australia’s high immigration intake.
I’ve been critical of our federal government’s preference for a ‘Big Australia’ because it has been pursued with little regard for our existing infrastructure and natural resources (The Big Australia illusion; April 22). But low population growth poses its own set of problems.
Why would businesses invest in SA or Tasmania when their market would grow more quickly elsewhere? They might be beautiful states but there’s little room for sentimentality in business.
Attracting capital investment has been difficult in these states – so difficult that it encouraged the Tasmanian government to sponsor an AFL team to increase tourism and offer the most generous first-home builder grants in the country. Tasmania has to be creative to keep its economy chugging along.
The other trend worth keeping an eye on is Australia’s ageing population. This has been well documented on a national level, but each state will be affected differently.
Over the past few decades Australia and each of the states has experienced favourable demographics that have helped boost real GDP growth. From 1980, the share of the population aged between 25 and 54 years of age increased sharply in each state and territory. Workers are traditionally most productive within this age group.
That created the sweet spot for economic growth and, combined with rising labour force participation among women, created the perfect environment for strong growth. But those favourable demographics are at an end, with the share of the population between 25 and 54 years old now on the decline.
The effect has been felt most in Tasmania and SA, where the populations are oldest. But each of our six states is generally quite old, and growth will continue to be hamstrung by an ageing population.
The Australian economy continues to be underpinned by strong population growth but it has been concentrated on the east coast and in WA. Despite a strong immigration intake, our demographics continue to turn unfavourably and that will weigh on growth over the foreseeable future.