Ageing population a global problem

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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?

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Written by Leon Della Bosca

46 Comments

Total Comments: 46
  1. 0
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    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.

    • 0
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      Increase the pension and get rid of the tax. Yes, that will fix the global economy Fast Eddie.

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      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.

    • 0
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      There’s that money tree again.

    • 0
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      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.

    • 0
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      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.

  2. 0
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    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”.

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      Agreed Patriot!

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      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?

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      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”!!!

    • 0
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      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

    • 0
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      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.

  3. 0
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    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.

    • 0
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      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.

    • 0
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      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”.

  4. 0
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    If they did not have us oldies there would not have been this generation to worry about us being a burden

  5. 0
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    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.

    • 0
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      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?

    • 0
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      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……

    • 0
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      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

    • 0
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      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.

    • 0
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      Rae, I thought Mr Baird was going to be OK………….cant wait to the next elections……….

  6. 0
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    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.

    • 0
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      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.

  7. 0
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    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.

    • 0
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      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.

  8. 0
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    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.

    • 0
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      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

    • 0
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      tia-maria totally agree with you

  9. 0
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    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.

  10. 0
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    Don’t worry we oldies will all die, just not as quickly as some would hope!!!

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