Australia’s ageing and rapidly expanding population is a massive economic and social challenge. That is the compelling and sobering message from the Productivity Commission, one of the Federal Government’s key sources of policy advice. In a landmark report released yesterday, An Ageing Australia: Preparing for the Future, the commission states: ”Such slow and profound shifts in the nature of a society do not elicit the same scrutiny as immediate policy issues. The preferable time to contemplate the implications is while these near-inevitable trends are in their infancy.”
The Saturday Age applauds the report, which is available on the Productivity Commission’s website, and which has implications for every Australian. It is a document that should rejuvenate a community-wide debate on how to adapt best to such pivotal changes. The warning it contains is clear: should our lawmakers fail to respond with far-sighted and enlightened policy changes, the quality of life for all in this nation will be lower than it ought to be.
The population is forecast to rise to 38 million by 2060, an increase of 15 million from today. Unless big changes in policy are made, that would create huge budget deficits, fuelled by the surge in pension recipients and in the demand for health and other services. The commission says Australian governments are facing increased spending pressures of as much as six per cent of gross domestic product by 2060. In a relatively low-taxed nation, we need to at least contemplate higher taxes.
The changes being driven by advances in medical technology and public health are perhaps most starkly reflected in life expectancy and demographics. A girl born today can expect to live for more than 94 years, a boy for more than 91 years. The number of people aged 75 or more will grow by four million by 2060, rising from 6.4 per cent of the population to 14.4 per cent.
This points to the need for a change in attitude by employers to hiring and keeping workers beyond the age of 50. Far too often, there is a failure to recognise the value of experienced staff, and if the community is to have any chance of effectively dealing with the fiscal, economic and social implications of the ageing population, people are going to have to remain in work longer.
This means workers, too, will need to change their attitude. The concept of compulsory retirement is becoming redundant, and that is not a bad thing; idleness often triggers physical and mental health problems. Rather than go from a full-time role to unbroken leisure, people should be reducing their working hours as they grow older.