Ageing population a global problem

The RBA claims that an ageing population coupled with low interest rates is a global problem.

Ageing population a global problem

According to the Reserve Bank of Australia (RBA) low interest rates coupled with an ageing population is proving problematic for the global economy.

And the growing number of retirees who are expecting to live off the interest earned from their superannuation savings may be seriously disappointed in the future.

“In a low interest rate world, the problems of providing retirement incomes will become ever more prominent,” said Reserve Bank Governor Glenn Stevens. “Overall, in a world where a higher proportion of the population wants to be retired and living – even if only in part – off the return on their savings, those returns are likely, all other things [being] equal, to be lower.”

“And there are more of such people, living longer,” he added.

Mr Stevens believes that, due to the world’s ageing population, there are fewer people of working age, which hamstrings the global economy by effectively reducing the ability to pay for welfare and public health care costs.

“Instead of five or six people for every retired person there’s two or two and a half,” he said. “It may be that jobs will be robotised ... in the long run we may need that to some extent.”

And with health and aged care continuing to be a major focus of government spending: “The thing we have to most grapple with is to make our children more productive so they can earn enough to pay the taxes and help the capital return to keep us in our dotage,” said Mr Stevens.

Read more at www.sbs.com.au

Are you finding that low-interest rates are adversely affecting your retirement income? What ideas do you have for amending this issue? Are there enough jobs for older people to help them fund their retirement? Are there sufficient taxpayers to provide adequate contributions towards paying for health and aged care?





    COMMENTS

    To make a comment, please register or login

    26th Nov 2015
    10:49am
    Low interest rates on earnings and investments are not good for anyone hoping to make a quid, but even worse on retirees when they rely heavily on them for income. This doesn't seem to concern the RBA one iota. To help with the shortfall, increase the pension and/or cancel all tax paid on super. Most aged people don't want to work or can't. For health and aged care increase the government supplement towards both. Dream on, dream on.
    Sceptic
    26th Nov 2015
    4:36pm
    Increase the pension and get rid of the tax. Yes, that will fix the global economy Fast Eddie.
    Rae
    26th Nov 2015
    5:55pm
    Well actually as the global economy is in a deflationary funk right now with investment income and wages continually declining in real terms raising the aged pension and increasing benefits to lower income recipients who spend most of their money would help to fix the economy by getting money flowing once again.
    Sceptic
    26th Nov 2015
    7:10pm
    There's that money tree again.
    Rae
    27th Nov 2015
    8:04am
    Sceptic you should research how money is created and added to the economy. We don't even need a tree because money is only a medium of exchange. It is literally created on balance sheets. Most of it never exists in the real world anyway.

    Banks create it when it is borrowed and it disappears again when it is paid back. That is part of the problem now. The elderly don't borrow as they previously did and business borrowing is down as well. There is less real money in the real world, So we have deflation.

    Pumping money into that real world would help business a whole lot.

    Watch what happens next with pension incomes cut for self funded retires, penalty rates gone and a whole new tax on everything in the new GST. You will see what I mean.
    Patriot
    27th Nov 2015
    8:12am
    Rae,
    Once we RESOLVE the money issue and FORCE OUR GOVERNMENT to inject money into Australian Society "Debt Free" (as per req1uirement of the Australian Constitution) ALL other problems will be resolved automatically.
    This as the GREED issue will dissolve as there is "Money Forever" without ANY penalty!

    Just watch the video on the link provided below and you'll see how Iceland dealt with this issue.

    https://www.youtube.com/watch?v=7zlzC_XMQzI

    Money TO BE created for the benefit of the people (Not the Banksters) is currently on the agenda of discussion in" The Netherlands, UK & Switzerland.
    Patriot
    26th Nov 2015
    11:06am
    As the process of aging - generally - accumulates much "Life Experience & Wisdom" an "Aging Population" should be regarded as a Blessing rather than - as our current (political) society does - a "Massive Problem".
    leonYLC
    26th Nov 2015
    12:03pm
    Agreed Patriot!
    Anonymous
    26th Nov 2015
    12:27pm
    The "Massive Problem" is located in Canberra. We (The Aged) have done our time and paid our dues and it is the government's moral (too bad they don't have a conscience) and legal (it's a shame they are crooks) responsibility to honour their part of life's contract. Yes?
    Patriot
    26th Nov 2015
    2:30pm
    Fast Eddie,
    The problem in Canberra is only there because - WE the People - are Gutless and/or stupid. We FAIL to FORCE the "Clowns & Criminals in Canberra" to act in the interest of ALL Australians & Australia rather than SERVE the Interests if the MULTINATIONAL GLOBAL CABAL(S) (and as a consequence themselves of course).

    Those Politicians who are PUSHING the Globalists Agenda should do well to remember that: "There never is any honour amongst Thieves"!!!
    tia-maria
    26th Nov 2015
    4:04pm
    Patriot yes the massive problem is our Canberra politicians ripping off
    the taxpayers of Australia.............On top of that how about they start cutting back........... handing out our hard earn tax money to refugees (really this a major issues and costing us dearly)........Stop handing out big payouts to stay at home mums and dads of our society....... As they should act more responsible having your own kids.........and not taxpayers.

    Sometimes I feel we are the ones who are a burden to politicians unreal AAAAA
    marls
    26th Nov 2015
    10:00pm
    the aging population have paid their share of tax over the years, that is not the problem, the major problem these days is the age of entitlement for politicians and their families not to mention the millions spent on domestic violence, drug abuse, drive by shooting, open boarders to people who will never work a day in their life and want more and more. on one hand we allow the unknown into the country whilst then turning around spending billions for security and its still not enough.
    maelcolium
    26th Nov 2015
    11:34am
    The RBA governor should stick to the knitting before he starts to waffle on about the intergenerational meme which is one of the most insidious tricks put out by the neoliberal conservatives.
    The RBA charter is to protect the economic health of the country for the benefit of all Australians - his performance in that regard is appalling. Having failed in his job, he wants to redirect scrutiny to another spurious and ill informed debate. Time for him to piss off.
    Rae
    27th Nov 2015
    8:12am
    Personally I like the fellow but like most economists he is trapped by the maths and the ideology.

    The World Bank, IMF and Central Banks have all failed badly.

    In fact they are a big part of the problem. By persuading governments that Central Banks could manage the economy they allowed bank deregulation. The Central Bankers can't control the banks at all.

    While we slowly sink into the liquidity trap the bankers sit and debate whether such a thing can exist or not! Sigh.
    Patriot
    27th Nov 2015
    8:15am
    Rae,
    Controlling the banks is NOT in the interest of the Banksters as this would NOT create the "Boom & Bust" cycles which - every time - transfers wealth from the ordinary people into their coffers at a "Vast & Unprecedented Rate".
    rattler
    26th Nov 2015
    12:29pm
    If they did not have us oldies there would not have been this generation to worry about us being a burden
    Jude
    26th Nov 2015
    12:42pm
    We of the 'aging population' cop it both ways, we paid the high interest rates, we are now the problem! we didn't have credit cards, saved or lay-byed what we wanted, or did without. Current generation (not everyone of course) huge homes, latest appliances, expensive furniture, huge credit card debts, low interest rates, overseas holidays, expensive graduation outfits, gap year etc etc Is the fact that we oldies are a problem because we don't have huge debts and live beyond our means? Just talking generally here, just sick of people laying the blame for everything on us oldies.
    Rae
    26th Nov 2015
    3:21pm
    I think we should demand our childcare rebates, baby bonuses and first home owners grands just as a beginning. Perhaps a rebate on the excessive rates of tax we paid as well.

    The governments have sold off all the assets built with our parents and our taxes so now have an income problem. That money would have looked after the aged just fine.

    Where has all that money gone anyway?
    TREBOR
    26th Nov 2015
    4:03pm
    Been there already, Rae - I took time off for, my children and so did my ex etc... a year at my then (1992) income of $100k+ - I reckon Tony's PPL should have been backdated. The ex has three kids and did the full time thing for years - how does 50% of salary for those years backdated and adjusted for CPI etc sound?

    Would help in retirement......
    tia-maria
    26th Nov 2015
    4:12pm
    Rae,
    You have that right our bloody politicians have sold off so much of Australia a dam disgrace.............and yesterday our electricity brought in heaps of dollars for Mike Baird.........shame on him.......(and one of the owners is a guy from the Middle East)
    .......No respect for our diggers.......... who fought a endless in the Middle East............. to give us a peacefully way of life and live in a rich land that our grand parents worked their butts for only to be sold off to the higher bidders
    Rae
    26th Nov 2015
    6:00pm
    I don't know what the annual dividend was that the government received for the electricity network but I suspect we spent more than the $10 billion paid on building the system and now there will be no profit take at all. What a piddling little amount of money they got.

    I thought Baird was a banker and would have at least got a good deal.
    tia-maria
    26th Nov 2015
    6:49pm
    Rae, I thought Mr Baird was going to be OK.............cant wait to the next elections..........
    Charlie
    26th Nov 2015
    12:48pm
    There is not much done to help people who are no longer well enough to work full time. If a person is no longer well enough to work full time they can draw their super at 55. But most people don't have enough super to generate a good wage so they have to go on disability support pension.
    Where things go wrong from 55 to 65 is that the disability support pension in this age group does not provide the (same protection of super for the person working part time) as on age pension and working part time. For example on disability support pension at 55 the amount of money a person is allowed to earn and still get full disability support pension is not all that different from a person on unemployment benefits. This causes an even faster erosion of the super before the person even reaches 65. At 55, people no longer able to work full time, should be under the same earning capacity rules as age pensioners. This would allow them to earn more money without their disability support pension being affected.
    Charlie
    27th Nov 2015
    9:21am
    Sorry for replying to my own blog but I lost the point I was trying to make and that is, that government and industry should be providing better support to aged people who want to continue to work part time, even if that means providing work in half-days for skilled people who no longer have the stamina to work full days.

    This might be seen as taking employment away from young people, but there is not always a need to employ somebody full time and its the full time jobs that young people should be aiming at while they are able, rather than seeking out a lifestyle of unemployment benefits and casual work. I recall doing this for years while I was young and in between careers and I look back on it as lost time.

    It seems that compulsory super hasn't been around long enough to get everybody into a full investment paid retirement and many of us will have to work on till we drop, but that's better than being too idle to have any further interest in life.
    Tom Tank
    26th Nov 2015
    12:59pm
    Just a memory jogger. Back in the 70's and 80's with the advent of modern technology a lot was talked about a 30 hour working week due to the impact of these new technologies.
    Surprise surprise the benefit of these technologies have not been shared around throughout the whole community, instead so many have lost their jobs and those who do have jobs are often working longer.
    If fairness was to apply, wishful thinking I know, the savings brought on by those advances would fund age pensions as well as maintain employment levels.
    Rae
    26th Nov 2015
    3:28pm
    Tom it is very interesting to web search a graph of the productivity gains from 1945 to 2015 compared to the median wage.

    From 1945 to 1970 there was equity and then it stopped.

    Throughout our entire working lives we have been ripped off and now this whinge about not having enough money.

    There is plenty of money just get it back from the top 5% that have it all.
    Andy
    26th Nov 2015
    1:16pm
    how proud I am of those comments,shows us older people know we are not the problem. Unemplyment of the young majyor, but to hard to take on, so lets hit the oldies.Politicans allowances also out of control,needs a complete overhall, any increase in refugees complete madness, who you take money from to pay for that? just look oversees, counties going down by the bucket loads.
    tia-maria
    26th Nov 2015
    4:16pm
    Andy good comment mate...........yes politicians too dam busy giving to refugees ......and show........... no respect for their seniors of this country.........we worked hard.......and our grandparents before us .........only to be given away to every one who never earned it to even to call our county their home
    marls
    26th Nov 2015
    10:04pm
    tia-maria totally agree with you
    don
    26th Nov 2015
    1:29pm
    Is it not strange how low the polliess stoop. One minute they are worried by our health and wanting us to live long lives eg labors extra tax on cigarettes for a start , then its a worry that we living too long lol. If you live in the country , there are no jobs for the old let a lone the young. I think the RBA are good its the pollies who are no good, and I think their attitude is , we messed up , no money , lets see how we can raise some taxes to get us out of the s$%^t.!! I don't know about you but in WA we are getting hit by everyone , as no money and there is a lot of hardship , for the old as well as the young. I don't think there is a decent pollie left in the whole of oz.
    WendyP
    26th Nov 2015
    1:43pm
    Don't worry we oldies will all die, just not as quickly as some would hope!!!
    Patriot
    26th Nov 2015
    2:33pm
    WendyP
    Actions emanating from Canberra would suggest that "Death to the Oldies" is "Just not soon enough" though!
    Chris B T
    26th Nov 2015
    3:35pm
    Who's fault will it be when there is higher interest rates.
    Defaults on loans, no jobs because we don't own the farm/resources anymore.
    TREBOR
    26th Nov 2015
    4:00pm
    First off - I give about two decaying rat's posteriors for the 'global economy', which is a disaster for everyone but the middle men, who prosper mightily from it at the expense of those at both ends, the basic producers and the end buyers.

    In that sense I'm more than happy to be a burden on the economy/budget, and receive my dues.

    Rationalising the retirement income strands system would go a long way to resolving this issue as regards real opportunity in retirement for the many, who will, of course, be unemployable anyway, so provision must be made NOW.

    I read yesterday that something like 50% of banking jobs would disappear in the next ten years or so, and this is a sign of the future in many ways for many avenues of employment. The only way to circumvent the disaster of massive unemployment and consequent dismal retirement opportunity for the many, and all the social ills that accompany these social disasters - is to tame the economy now and reduce it to the service of the people properly.

    This means that technological advances should fulfill their promise of relieving humanity of hard labour, and not by thrusting people on the scrapheap.

    It also means that our current approach to transfer of goods is inadequate for its purpose of developing a thriving economy, and this also must therefore be tamed so as to be a servant of all and not of some, who hide in tax havens.

    Damn - I sound like a mad Commie sometimes... but more of a socialist, I think.
    Patriot
    26th Nov 2015
    4:47pm
    TREBOR
    Indeed, the Global Economy SHOULD be of "No Concern" to us as Australians.
    We - as a country - should be totally "Self Sufficient" in Every & Any way. And we WOULD be if the Politicians did not elect to "SELL-US-OUT" at Every Possible Opportunity.
    TREBOR
    26th Nov 2015
    8:48pm
    You got that 100% right, Patriot.
    TREBOR
    26th Nov 2015
    4:14pm
    Reading the comments here - I'd say that politicians and their running dogs would be wise not to tangle with older Australians - we seem to know the ropes too well.

    Thank you all for comments...
    Supernan
    26th Nov 2015
    4:31pm
    Low interest rates are so short sighted ! They encourage people into mortgages & when interest rates rise, they lose their house ! We paid off our house when interests were 16% to 20 %. Then just when we want to earn interest, down they drop ! Statistics show there are more non mortgage holders than morgage holders ! So low interest only helps the few !
    Most older people would prefer to earn more from interest & less from pensions ! If investors have more money they invest more in businesses, spend more & employ more people !
    Patriot
    26th Nov 2015
    4:43pm
    Supernan
    Whilst "Violent Swings" of interest rates MAY be looking somewhat "out-of-Hand", the mechanism is very carefully "Planned & Managed" exactly for the purpose as you indicate.
    People loosing their homes because of this only causes Hardship to those unfortunate people and - many times - poses an increased burden on the rest of the TaxPayers via additional social support needed.
    However, the "Very-Well-to-Do", the "Banksters Gangsters" and the Elite are benefiting enormously because of such calamities.
    Another reason why us Oldies are "Past our Due-By Date" is because many of us have been smart/lucky enough to - at this age - be "Clear from the CLAWS of the BANKSTERS" and so we do NOT pay any DIRECT Interest to their benefit.

    It's "ALL-a-SCAM!!!"
    Amadeoz
    26th Nov 2015
    4:50pm
    "Australia's most Useless" has spoken again LOL. I still remember reading that this overpriced clown, from the pomp of a $6700 per day Sheraton hotel suite told the big banks not to follow the guidelines of the Federlal Reserve Bank and charge mortgages any interest rates they liked. In the following days, all major banks lifted their bank rates. It's like a PM or CEO telling the people"don't take me serious, just do whatever pleases you". That "useless" boss of the banks' Bank apparently does not know what his job is.

    He is in charge of our country's monetary policy, Safeguarding the internal and external value of our dollar with an eye on achieving full employment. Well, it happens all outside his control, no surprise. He seems to have no clue. Once it occurred to him to lower the interest rate; when the big banks woke him up to reality, he quickly went the other way and gave the rate a big boost.

    Now he insults the elderly who have spent a life time working hard to bring Australia to the level of economic and social welfare we now experience. And not only are they doing wrong toward their country, they are a global pest.

    The current Treasurer must sack this "most useless Australian" and replace him with a professional economist. Mr Turnbull seems to be eager to replace the dudes with capable administrators. If necessary, Alan Jones must be involved, he gets a few things done, it seems.

    Check out http://www.news.com.au/national/is-he-australias-most-useless/story-e6frfkp9-1111115977362
    carmencita
    26th Nov 2015
    7:23pm
    It is getting tiresome targeting ageing population as a villain in global economy or in a country's economy instead of looking at mismanagement of public funds, extravagance on the part of MPs allowances, corporate tax dodging, tax evasion of 'foundations' and charity organisations, etc. . .. inefficiency of administration, etc. . .
    bartpcb
    27th Nov 2015
    10:21am
    What a load of absolute convoluted rubbish, being passed of as logical reasoning. We all accept that the RBA and it's equivalents have their own political or economic masters to appease but this stigmatisation of the aged is quite pathetic. If all the oldies dropped of the perch tomorrow, or chose to drop of the perch tomorrow, the economist would really be up shit creek without a paddle. As for low interest rates, no economy that has all but zeroed it's interest rates has done as well as Australia during the recent financial crisis. And it should be remembered that it was the so called 'logical economist' of America that kicked the whole thing off.
    Rosebud
    27th Nov 2015
    6:07pm
    The long and short and all the in between's means the more they either tax or lower the eligibility amounts to receive part pensions etc. the quicker our money runs out making eligibilty to receive a full pension much sooner which =EVEN HIGHER PAYOUT COSTS.
    b.mead@bigpond.com
    29th Nov 2015
    1:10pm
    I take offence to the media etc to often referring to the aging population as a burden or a problem to society!! So now I've reached the age of 63 I am now classed as a burden or a problem to our country!!??? I have worked all of my life, reared 2 boys, received a pittance from the government called child endowment, which was next to nothing compared to what is received by families today. I have paid my taxes all of my life, tried very hard to get myself a decent superannuation so when I retire I can take care of myself. (did without so I could do that mind you.) And of course along the way there has been plenty of Superannuation funds management, gladly taking so called fees out of my super fund. Yes they have all taken their cut!!! I have now retired and I am noticing more and more that now I'm aging, I am a burden. How did that happen???? I know there are millions of people just like me who have done the same. Is this what we need to endure now - that we are becoming a burden!!!! I've never been GIVEN anything nor have I expected to be GIVEN anything my whole life. Oh Government - give me and the rest of the hard working people a BREAK!!!
    Barbara Mathieson
    29th Nov 2015
    6:21pm
    Gee - someone didn't do the maths years ago ! I am not a damn burden on society , someone has been asleep at the wheel.The oldies / seniors have paid their way , worked hard and been responsible ! Perhaps a few more younger people should emulate this mantra?
    Governments try to 'grab' funds from easy sources I.e. seniors!
    Remind politicians , seniors are not banks, so don't come looking for easy pickings. Sit down and work it out you guys- show some good examples and integrity.
    Voyager
    30th Nov 2015
    2:16pm
    The subject of the aging population is unfortunately overstated somewhat by oversimplifying the analysis of data and subsequently taking the current average life expectancy and comparing it to the average life expectancy of earlier times.

    Life expectancy age is based on the average age of overall human mortality utilising a statistical tool called a life table, but statisticians and government fail to mention that the very significant reduction in infant mortality numbers over the last century has naturally inflated the average age of overall human mortality. This in turn is used to support the assertion that the population is ageing. The simple fact is that people are still dying at around the same age as they were fifty years ago. The rate of exceptionally old people remains basically unchanged despite the impact of the two major wars on our population.

    There is an argument that modern medicine is keeping more people alive; and for longer. The evidence however is based more on extrapolation and assumptions rather than hard data. People living healthy, active lives into their late eighties, is no new phenomenon. The Honourable Joe Hockey famously stated that we will be living until we are 150 years old in the not too distant future. Now that is food for thought and wonderment!

    Most people reading this will themselves have experience of friends and relatives passing away and upon contemplating the age of the deceased person and others, will realise that what I am saying is in fact the case. Yes, the population of this planet is growing and with it, all the problems of pollution, food sustainability, housing and governance. However, the raw data does not appear to indicate that the age distribution within our human population is significantly different to the past. So, one has to ask the question, why are Governments and NGOs critically targeting the aged, especially we baby boomers?