The wealth and wellbeing of those aged 65 to 74 dropped in 2020 but increased for those aged 45 to 54, and 25 to 34.
The Australian Actuaries Intergenerational Equity Index (AAIEI) analyses 24 indicators across six domains – economic, housing, social, health and disability, education, and the environment – to track how wealth and wellbeing for different generations change over time.
Some of the latest data indicates worsening outcomes for the oldest age cohort, including rising rates of homelessness for older Australians.
Overall, the number of people expected to be in poverty was estimated to have dropped 13 per cent during the pandemic, compared to an increase of 90 per cent had the government failed to provide additional support. Poverty rates remain high for single age pensioners who do not own their home.
The largest growth in those seeking homelessness support came from older Australians, who have also experienced a significant increase in poverty rates since 2016.
“Higher homelessness rates for older Australians are a growing concern, which has lowered the index score for older people,” said index compiler Dr Hugh Miller. While financial distress drives homelessness, more people sought support because they were also experiencing domestic violence or mental health problems.
The index found anxiety rose because of the pandemic and suicide rates remained stable or even decreased slightly, a good outcome considering early predictions about the effect of pandemic measures.
Actuaries Institute chief executive Elayne Grace said decisions made during the early stages of lockdown, including increased bail rates for offenders, and housing for people who were living on the streets, could inform future policy.
“There may be an increased appetite for experimenting with different types of support given the demonstrated ability to adapt so quickly through 2020,” she said.
The federal government has postponed its own Intergenerational Report (IGR). Independent Australia (IA) reports that its population projections are nonetheless being revised, with an increase of 1.37 per cent projected by 2025.
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IA says deaths will continue to rise strongly during the 2020s and 2030s as an increasing number of the early baby boomers pass away.
“The ABS has projected deaths exceeding 200,000 per annum from the second half of the 2020s. Deaths in 2019 were around 169,000 – the highest to date.
Population growth will be at record low levels in the next couple of years due to low migration with the nation’s borders being closed by the pandemic. But Treasury’s new long-term net overseas migration target is 235,000 per annum by 2024-25.
The government’s long-term forecast is for productivity growth of 1.5 per cent per annum, almost double the rate of 0.8 per cent per annum in the period 2013-19.
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IA columnist Dr Abul Rizvi, a former deputy secretary of the Department of Immigration, is sceptical about this prediction and says all the government’s financial plans “come crumbling down” if the projected net migration rate is not reached.
He says policy changes will be required to reach such numbers, as migration from China is likely to decline.
“Putting in place a sensible set of policies to get to net overseas migration of 235,000 per annum will not be straightforward.”
The New Daily’s Michael Pascoe says Australia desperately requires the treasurer to heed an “honest” IGR.
“The 1998 Charter of Budget Honesty Act requires the treasurer to publish an IGR every five years to assess the long-term sustainability of government policies over the next four decades.”
He says postponing the IGR until after the May Budget was “like a cart being placed before a horse”.
“It would be more reassuring if budget estimates were made with the benefit of a robust IGR’s examination of the demographic outlook.”
He says Treasurer Josh Frydenberg’s 2019 Budget had a 10-year plan that was built upon “joke demographic assumptions” that had to be quietly buried.
“A treasurer can get the projections he wants the public to see by fiddling the assumptions poured into the budget sausage machine,” he says.
Dr Rizvi is an expert on the “ageing stage” of developed economies, when population shrinks, and average age keeps rising.
“A very strong labour market would be required to maintain a high participation rate given the number of retirees in Australia’s population, net of deaths, is likely to rise by another million by 2030 to around five million,” he says.
Dr Rizvi believes a stationary population means peace and prosperity depend on a more equal distribution of incomes, as John Maynard Keynes said in 1937. That means changes to taxation for high-income earners.
“Population ageing drives down per capita tax revenue while driving up per capita expenditure.”
Do you think our population and economy will grow as predicted post-pandemic? Are you better or worse off since the pandemic?
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