Ageing population not a burden

The increasing cost of the Age Pension is not due to demographic ageing.

Ageing population not a burden

Australia’s ageing population has long been discussed in terms of the financial burden it will cause. But a new report, published by the Monash Centre for Population and Urban Research, suggests that the increasing cost of the Age Pension is not due to demographic ageing. Rather, it has been caused by government policy changes.

The report, published yesterday, says that fears Australia’s shrinking proportion of tax-paying workers would not be able to support the ageing population are unfounded. “Even with no further growth in labour force participation rates, the proportion of workers will not fall as low as it was in the 1960s.”

Dr Katharine Betts, the author of the paper, has blamed Government decisions for the apparent increase in ageing costs. She cites policy decisions such as widening access to the Age Pension, and abolishing tax on superannuation payouts as being partially responsible. The report also shows that the number of older Australians actively engaged in workforce is at an almost record high.

“Some … are happy to deride baby boomers, [but] this does not help older people cope with discrimination,” Dr Betts writes. “In a more positive social environment, labour force participation rates for older people would be even higher.”

Dr Betts says only about 40 per cent of taxes are based on paid labour, meaning the remaining 60 per cent are likely to be unaffected as the population ages.

A comparison of data from 31 OECD countries shows no association between the proportion of a country’s population aged over 65 and the proportion of its GDP spent on health.

The US has one of the youngest populations in the OECD but spends 18 per cent of its GDP on health. Japan has the oldest but spends only nine per cent.

On Sunday Clive Palmer announced that his party would not support the Government’s proposal that the Age Pension eligibility age be increased to 70. Treasurer Joe Hockey and Prime Minister Tony Abbott have spent weeks explaining why the age increase is inevitable and necessary.

Mr Palmer told the ABC, "I just couldn’t employ Joe Hockey or Tony Abbott at 69 no matter how competent they are. They wouldn’t have a good future and I wouldn’t invest the time in training them because they’d be retiring the next year.

"I know Mr Abbott and Mr Hockey are not too concerned about the pensioners of Australia because they’ll have a big fat parliamentary pension that you’ve paid for. I think that’s the whole nub of it, really."

Prime Minister Abbott’s own party has also urged him to follow his own advice, and scale down his signature $5.5 billion paid parental leave scheme, in order to help share the burden of the upcoming budget amongst the age groups.

Read Dr Betts’s report The ageing of the Australian population – triumph or disaster? 

Read more at The Age website

Opinion: Finally someone does the maths

It’s interesting how we have all accepted and taken for granted the simple fact that the rising costs of the Age Pension can be attributed to Australia’s ageing population. And it makes a lot of sense. More people receiving the Age Pension means it costs more to provide. It’s a very simplistic view of a complex situation, but because it’s so easy to understand I’m sure many didn’t even think to question the logic.

Dr Betts’s report looks at the other contributing factors, such as government policy, and then turns its gaze further afield to other OECD countries around the world. It is these international comparisons which I think are the most important part of her report. They show that an ageing population can be highly involved in the workforce. They show that more older people in the community does not necessarily mean healthcare has to cost more.

It is vitally important we don’t let these findings go to waste. We need to be looking at the countries which are successfully managing and embracing their ageing populations, such as Canada and China, and ask ourselves, ‘what are we doing wrong’ and ‘what are they doing right’ and ‘how can we take the best parts of their systems and use them to our benefit’?

We don’t have to reinvent the wheel, something Australia is often guilty of when it comes to implementing new ideas and systems. Surely it would be cheaper and easier to simply borrow the knowledge these other countries have and apply it to our own situation? It’s time to stop blaming our ageing population for getting older (I’m sure if we could stop we would), and start finding real ways to embrace the opportunity which our national demographic is offering.

What do you think? Is this the turning point for the way we think about our ageing population? Or will this report just get swept under the rug like so many before it? And, with all the leaked budget cuts, do you think pensioners are getting the short end of the stick?


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    29th Apr 2014
    29th Apr 2014
    Amen! They should be lynched!
    30th Apr 2014
    While I think politicians ought to lead by example I not entirely in agreement with this comment. Compared to a lot of others in the community (e.g. sports stars, lots of CEOs) our politicians and in particular the PM are not paid well. We need a diverse variety of very capable men and women in parliament and we need to pay them well. Unfortunately if we aren't attracting the right people towards public service and parliament it may have a lot to do with the selection processes of the major parties and the apathy of a lot of voters.
    29th Apr 2014
    The saddest thing is we still have to suffer these fools and suffer the consequences until the next election . Clive wouldn't employ them at 69...I didn't want to employ them at their present age
    29th Apr 2014
    I'll bet they Gutsed their Milk as Babies TOO !!!
    29th Apr 2014
    In this country we call it MathS - we do the maths!!! We haven't been taken over by the U.S - yet.
    29th Apr 2014
    I agree, that grated with me too' As far as I am aware, the discipline is: mathematics. This and other poor Yankeeisms (there are good ones!) are getting too frequent, including on this site.
    The other thing about us old buggers is that, by and large, we would be 'efficient spenders' by which I mean that quite a high proportion of income would be regularly spent on goods and services. Consequently, loot and general economic activity is both shared around and maintained better. Who would 'spend better' overall: a millionaire or ten people with 100K (or 20 with 50K)?
    Kaye Fallick
    29th Apr 2014
    All fixed :-)
    29th Apr 2014
    The saddest thing about this is, the Government has created a "hate Pensioners attitude, because we are are a drain on the budget". Well now the truth is out, are they going to correct this ill perceived idea of theirs?
    29th Apr 2014
    I am a Baby boomer. We were unkindly called "The Bulge" in the UK when I was a child. For example, there were 5 1st year classes in my high school in 1958, which over the next 3 years reduced to three (it was a grammar school, not private, with only 500 students.) I consider the ageing population certainly can be a burden. We are living too long due to unnecessary medical interventions because we fear death. I have NO desire to go into a nursing home having seen both my parents in one - and it was a good one - nor have I any desire to cost the taxpayer a fortune by ending up in long term hospital care or ICU. As 80% of Australian want voluntary euthanasia, this is the choice that many of us would like to have the option to make. It amazes me that politicians don't allow us this choice. I repeat, it is a choice.
    29th Apr 2014
    Interestingly a lot of politicians are over the current retirement age... Do we want them running the the country aged over 70? But then their pensions...
    29th Apr 2014
    A Labor government tried to bring in a National Super scheme in the 70's but the LNP moaned. It didn't happen and now we are wearing the consequences. Many my age 60, do not have adequate super because they didn't expect to need it, we're stay at home mums, or weren't allowed to contribute to work place schemes because they were 'blue collar' workers. We need to support these people and one place to start is taxing wealthy retirees and taking benefits away from them. Frankly if I was earning my current salary of 80,000 in retirement I'd be more than happy to support myself and pay tax. We've supported wealthy people long enough through tax concessions and minimisation strategies. Besides the fact that the whole 'economic doom' situation is a fallacy.
    29th Apr 2014
    Totally agree with your comments. The government certainly could learn off other countries in many ways but refuse to acknowledge that other countries can do it better. Maybe it's an ego thing.
    29th Apr 2014
    Of course it is. They don't like to think that someone has worked it out when they cant. So rather than stand up and say, hey this is good it works, let's adopt this system, they stick their head in the sand and make people suffer from their incompetence.
    29th Apr 2014
    Its becoming like a Roman Galley !! If Your hands are Blistered and You can no longer row..You get tossed Overboard !!
    29th Apr 2014
    Everyone must think that the payments that pensioners receive just vanish into thin air.
    Pensioners would have to be the greatest spenders in the country. People with money are reluctant to spend and what this country needs is spenders because spenders equal TAXES that governments can waste.
    29th Apr 2014
    Totally agree with this - All my pension goes straight back into the economy, whether it is in food, power, medical costs, and the occasional travel or gifts for family.
    29th Apr 2014
    I am constantly amazed at the lack of both facts and planning by all governments when blaming future pensions are a cross upon the welfare's shoulders; as our population ages, is it not a fact that more and more pensioners will be superannuants, so they supposedly will be self-funded and not a burden upon the taxpayer!

    Not once has either government, media, nor Life Choices ever mentioned this fact or is everyone afraid of saying 'Self Funded Retirees', because I'm not! So, how about we do start talking about it instead of claiming as all including the government that as if there will not in the future be such people as self-funded retirees, and that everyone who retires will do so on the public purse!

    I really cannot remember a case where a government has not got into power and given themselves pay rises and increased superannuation, always lining their pockets with the poor man's gold and silver as Scrooge did in Christmas Carol. As was pointed out to me that there are more Public Servants than old age pensioners, then governments including public servants need to stop skimming the cream and start having some down to earth humble milk for a change.

    I never received anyone's comment when I stated that not a single politician can survive on the meagre pension for more than a few days, not taking the risk they could be trying the pension out when the gas and electric bills come in, or the rates and other expenses are rapping at the door to be recompensed for supply of services. However, someone did say to me that I need to be careful what I say about politicians and public servants as they can make my pensionable life a hell if they so wish; why on earth are they called 'Public Servants' in the first place, because they are servants of the general public and not as they seem to be pirates that do nothing but pillage everyone's purses for whatever they can get! I think a rethink is needed when public servants out number us all, don't we?
    29th Apr 2014
    29th Apr 2014
    YES !! AND ME TOO !!.. Its about time someone said it as it is !!
    30th Apr 2014
    Yes indeedy, Great Golly.... agree entirely and would love to see these pollies made to survive on the meager income that most of us have had to endure. They do not live in the real world and have it to too good for too long.
    Tom Tank
    29th Apr 2014
    There is so much truth in the Monash Centre's Report but we live in a society where it is always the low end of town that is blamed for all financial ills.
    "Wages are too high" we are bombarded with and similarly with pensions. If both these were true then the lead should be given by those are our elected leaders. Wages rose 55% in the last 10 years while politicians salaries rose 90%.
    Pensions not to be paid until aged 70 while pollies get theirs on leaving Parliament irrespective of age.
    Peter Costello has a part time job that pays $198,000 per year but this does not affect his parliamentary pension.
    Come on Politicians put your money where your mouth is provide the lead in this so-called crisis.
    29th Apr 2014
    Some interesting figures here. I posted this comment earlier today but it has been deleted Who by I wonder? Please tell. *external link removed by moderators*
    29th Apr 2014
    The last person anyone would want to hear from is Larry Pickering, a conman, criminal and schister. At least pick someone with integrity to quote.
    29th Apr 2014
    Greatgolly, with the exception of the language, I agree with the points you make about ex MPs. It is much the same as I have myself posted before. I have no real problem with the salary levels or even the superannuation packages they get. What I do object to though is their ability to cash it in when they lose their seat instead of having to wait until retirement age like the rest of us. Then notwithstanding the very generous life long super they are entitled to, we then have to continue to pay all the extras. Just what exactly do they have to spend their super on? Most of them continue to 'work' whether that is in a consultancy capacity, on the speaking circuit or heavens above an actual paying job with Macquarie Bank! AND don't forget we pay twice once at the Federal Level then again at the State level. Nice 'work' if you can get it Bob Carr.
    29th Apr 2014
    And the Winner is John Never Never Howard !!..Hip Hip HOORAY !!!
    Rachel Tyler Jones
    30th Apr 2014
    Hi Sen.Cit.84,
    As part of our website rules, we don't allow linking to external sites in our comments. This is why your initial comment was deleted, and this one has been edited. Please note too that Greatgolly's comment has also been deleted due to inappropriate use of profane language.
    I hope you can all continue to enjoy the conversation in a positive, on-topic manner.
    Old Fella
    29th Apr 2014
    What is the alternative to Ageing? Not in a hurry to get there, got my funeral plot though.
    So lets consider the other options , legislate compulsory euthanasia for those that have had children and no longer can serve as grist for the mill. Call for a referendum on the ideal age for everyone to leave community and living. Arrange for the aged to be employed in service and servitude to help hasten their end and usefulness ( for some poor wretches already happening). Any burden perceived on ageing, really is already being met by those in the cohort being nominated. When will the proponents of morbidity and selfish invention , Discover life instead?
    Star Trekker
    29th Apr 2014
    Be careful they might try and do a Logan's Run on us.
    29th Apr 2014
    Yes, we have got a family plot too. Leases don't last as long as when the plot was originally bought and used though. They used to be 99 years. I think they are now only 25 years. I also have a pre-paid funeral plan which I made some years ago but it only covers some of the costs. At current prices my eventual burial will cost at least another $6000.00.....When my Mother passed away in Aug 2009 we had to make sure there was a mininum of 10 years left on the lease. We had to extend the lease immediately to be able to bury my Mother with my Grandparents
    29th Apr 2014
    There may be more people going on age pensions but most of them have probably paid Income tax for 40+ years.....and their Super. is being taxed even before they have received any of it back unless they put it in a special Retirement Super Fund.. Some are retiring at an older age too so they are paying Income Tax for longer than was done preciously. Women always used to retire at 60. That has been the case for about 25+years.
    29th Apr 2014
    How interesting, Tony Abbott hates pensioners and the disabled but he opposes voluntary euthanasia!
    29th Apr 2014
    I totally agree. Hypocrisy indeed!
    29th Apr 2014
    Of coarse silly !! You cant TAX Dead People !!
    29th Apr 2014
    You've obviously never heard of death duties then!
    30th Apr 2014
    HMM?? Do You send the Duties from Heaven or Hell ?
    30th Apr 2014
    The aging population shld not be a problem. Lookat all the experiences that are going to waste. If a person wants to work, ad a lot do , then why o why cat they, . it has been proven that they aged person is more relable then a lot of the younger people. n they then they would not "be a problem" to tony abbott and therest of the political parties. wjo i might add , a lot of them are past retirement age. but they dont have to worry as they have grand pensions .
    I read somewhere once, that when a politician gets into power they make laws and rules that are way beyond the normal scope, why because they are not effected. It seems that this is true of the present government

    30th Apr 2014
    I ask... WHO's RESPONSIBLE........... hee, hee. and it ain't the aged pensioners

    30th Apr 2014
    However I am sure Mr. Hockey has his pension protected for when he cuts for him.....LOL
    1st May 2014
    The latest pensioner bashing concerns those who choose to live overseas on the pension.
    These people are saving the government money! they receive less in payments and are not using any other subsidised services. We should encourage people to retire overseas.
    When will we have governments that can plan beyond the next election? They should have set up a fund years ago to finance pensions.
    This unfortunately is typical of Australia the land of the fast buck. We had oil suitable for refining into petrol, so what did we do - export it. Now it is running out and we have to import it. The same is happening with gas. We import workers on special visas so the companies can save money, and then we educate their children at the taxpayers expense - what a bargain! We abolish the mining tax whilst giving grants of tens of millions to mining companies that have produced nothing and have directors paid huge sums.
    Your average accountant could probably run this country much better. If you want to see the fools running this country check out question time on the net, they should abolish this farce.
    Not Senile Yet!
    15th May 2014
    They love it when we all copy them...the pollies that is......a lot of finger pointing and blaming going on!
    Send your complaints to their wives.....they cannot ignore them!
    Bet their not happy with the recent decisions either!
    As to the elderly....over 55's and unemployed.....let them work 2/3 days without penalty on the dole or pensions....they will never get full time work without re-training.....and more than 1/2 can't afford that either!
    From 60 to 70 who wants to work full time anyway?
    3 days work and 4 days rest is a just reward for 40yrs anway isn't it?
    The liberals are supposed to be business orientated....well supposed to be......surely they understand that investment in people creates the biggest return of all!
    The country is just a business after all!
    Investment into retraining the over 5o's would be a wiser move than allowing them to go to waste on the dole or Invalid Pensions.
    2/3 days part time is only casual work annual leave......and retrenchment happens week to week or month to month as the market demand changes.
    Encourage them to work or retrain without penalty for HAVING A GO!
    Remember.....most of us o/55's were promised a pension because we had no Compulsory Super Schemes for over 1/2 our working life!!!
    We paid higher tax rates because of that promise....and the Politicians were supposed to put that 4% extra tax in an investment fund on our behalf to provide those pensions for the Baby Boomer generation.
    What di they do? They accessed it in bad times and invested into creating work and infrastructure.....not all that bad a thing!
    But did they ever put it back? NO NO NO......and where did the extra 4% we paid all those years go to after they raided the Piggy.....straight into the big Black Hole underneath Parliament House in Canberra!!!!!
    The Real reason they can't afford the pension payments to the Baby Boomers is not about less people working.....that is Crap!
    There are more working and paying tax than ever before....population increase will tell you that!
    The Real Reason is because they raided our Piggy Bank of taxes put aside to finance them!
    And no it was not Labour or Liberal that was to was Both...because they both agreed to access those investments for infrastructure.....but also never bother to put it back or re-institute the investment fund. They both voted to dismantle it long before Compulsory Super was ever brought in.
    Any Economist worth his Salt would explain that penalising the elderly for working part-time in retirement is counter productive to the Whole economy. It does not make sense economically to have these restrictions placed upon them.
    We have a transition phase to go through before Compulsory Super retirees eventuate with enough capital to not need a pension.
    Surely a Compromise can be arranged so the Baby Boomers who want to...and can....are able to do so without penalty!
    Come on Guys......think outside the square here......No one actually wants a free ride.....just a little more give instead of take on the penalties in place for wanting to work!

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