Australia’s population is set to rise by between nearly 50% and 100% over the next 50 years, something that will have implications for a host of current issues and policies.
Retirement policy, other areas of social welfare, health, climate policy, not to mention employment and taxation will be some of the areas that will be affected by the latest population projections from the Australian Bureau of Statistics.
Tax rates will have to change, health insurance will have to better reflect the ageing population and someone will have to invent a form of aged care insurance because the 65 years and over will be the growth sector of the economy and the population.
In a paper released today the ABS said that 2056, up to one quarter of the country’s population will be aged 65 or older.
That will be up from a current figure of around 13% of a population of 21 million.
The ABS said that by 2056 Australia’s population is projected to increase to between 31 and 43 million people, with around 23% to 25% being 65 years or older.
In actual numbers that could mean around 10 million or more people will be aged 65 our older, compared to around 2.7 million.
In 2007 Australia’s population was 21 million people, with 13% being 65 years or older. The ageing of Australia’s population is the result of sustained low fertility, combined with increasing life expectancy.
The number of people aged 85 years or over is likely to increase rapidly over the next 50 years, from 344,000 people in 2007 to between 1.7 million and 3.1 million people in 2056.
By then, people aged 85 years or over will make up 5% to 7% of Australia’s population, compared to only 1.6% in 2007,” the ABS said in a statement.
The Bureau said the projections are based on a series of assumptions that take into account recent trends in fertility, mortality and migration.
The most important issue will be in the social welfare, taxation and in the employment.
The number of people aged 65 or more will rise much faster than the population: it could be up to four times as fast (from around 2.7 million to more than 10 million) if the population grows to around 43 million.
If it merely increases to around 31 million, the increase will be milder, but still substantial, from the current level of around 2.7 million to around 7 million. That’s a tripling, which will still put more pressure on retirement homes and aged care, health services and on taxation and employment policies.
Water policy, global warming and carbon emission policies will have to be reworked to take account of these new figures.
Employers will have fewer people to choose from because the overall size of the working population will be smaller proportionately than it is now. Fewer people working will support more people in retirement, a situation that will call for some radical changes in taxation policy.
But more people will have to be encouraged to keep working (as is happening now) until well past 65 and even 70 years of age.
Eating habits will change, as will retailing: more online shopping and home delivery.
The other key implication of an aging workforce is that the public and private sector need to get serious about education and training.
There are already skills shortages in areas as diverse as engineering and accounting and the situation will only worsen as the Baby Boomers retire.
It is short-sighted policy to discourage young people from undertaking tertiary education, which is exaclty what HECS does. It biases tertiary participation to the middle and upper classes and therefore fails to maximise the future benefits to society and the economy of a fully skilled workforce.
The private sector also needs to lift its game. For too long (decades) companies have treated their staff as disposable commodities with little long-term prospects and from the company’s point of view, little return on training. The future of business in Australia depends on bulding long-term relationships between employers and employee, not the every increasing casualisation of the workforce.
I believe the intergenerational crisis can be financed by wideneing the income tax base to all working and non working incomes equally over the next two generations. Instead of giving every mother $5000 for her new born baby, it should go into a superannuation account in the babies name from year 0. At a conservative 7pc real rate of return over the next 66 years the future value of that $5000 investment would be $434810 add to that 9% of the average weekly wage (some $1200) invested as SG contributions over a working life of say a conservative 40 years with wages growth of 5% for indexation and promotion will add another $1.3M. New born super funds should not be taxed, and phase out taxes on superfunds at a rate dependent on years to retirement. Phase in retirement income tax at the same rate. This would redress the iniquity of tax free retirement incomes when working incomes are taxed when those incomes have larger outgoings in terms of child rearing, education and mortgage repayments. I believe the baby bonus is squandered. The nation could do the same as my proposal and invest its budget surpluses. Instead of giving short term tax breaks, invest those billions into a sovereign wealth fund like Norway does. Who knows, in 50 years drawdowns from sovereign wealth funds could match income tax revenue, so that ultimately no one pays income tax. Pity I won’t be around to benefit then. I’m 61.
What a complete load of codswallop. The usual scare tactics about an era when most of us will be dead ! 2056 ! That’s 48 years from now folks. Get it through your heads and look what has happened in the past 48 years-technology will have quadrupled beyond our expecations. This rediculous Puritan ethic that everyone must have a job is 20th century thinking. The chances are-by 2056 there just won’t be that many jobs-people will be paid to stay home ! A good demonstartion of the ludicrous thinking iof these wrertched think tanks : “Eating habits will change, as will retailing: more online shopping and home delivery.”..well duhhh! as if that is a revolutionary idea. YOU HAVE ABSOLUTELY NIL IDEA OF WHAT THIS WORLD WILL BE LIKE IN 50 YEARS-so quite the rediculous scare tactics.