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"Greying Australia": Future impacts of population ageing
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C O M M ON WE A LTt i PARLIAMENTARY LIBRARY ____ C. I. S.

MPS 103/86

"GREYING AUSTRALIA": FUTUREIMPACTS OF POPULATION » « AGEING »

A major publication on the impacts of an ageing Australian population was launched at a meeting of the National Population Council in Brisbane today (Tuesday). .

Council chairman and Minister for Immigration and Ethnic " Affairs, Chris Hurford, said the report highlighted the challenges facing a society in which the number of people aged more than 60 was expected to double within 35 years.

Entitled "Greying Australia," the report examines the economic, social and demographic effects of future changes in the age structure of the Australian population.

It presents the findings of a study by Dr Hal Kendig and Dr John McCallum of the Australian National University, conducted under the auspices of the Migration Committee of the National Population Council.

Mr Hurford said the rapid ageing of the population would increase pressure on public expenditure, expecially in health care, social welfare and income maintenance well into the 21st · century.

"However, I emphasise that opportunities, as well as problems, will arise," he said.

"Often overlooked is the largely untapped resource potential of the aged themselves. It is important this resource be fully used."

The report canvasses the demographic aspects of ageing, family and social life, housing, work and retirement, retirement income and expenditure, lifestyle implications, health, community care, the impact on public expenditure, and choices

for the future.

Parliament House, Canberra

2

It underlines the need for governments constantly to monitor demographic, economic and social trends in the short, medium and longer terms.

"Immigration, by increasing the size of our working and taxpaying population, spreads the costs of supporting our elderly and thus reduces the contribution of each of us," he said. "Because we are selective in the economic sectors of our program, taking younger people by choice, immigration also helps us to retard the greying process.

"My colleague the Minister for Community Services and I have been particularly concerned about the aged in our population from non-English speaking backgrounds. Earlier this year we established a working party to consider the AIMA report 'Ageing

in a Multicultural Society1 and bring forward recommendations for action by government. The working party is expected to report before the end of this year."

Among other findings, the report emphasises the need for Australians to pay more during their working lives to the costs of retirement.

Mr Hurford commended the report to all Government and non-Government agencies connected with care of the aged and to everybody interested in Australia's future.

"It is another example of the Hawke Labor Government taking the long-term approach to government," he said. "We intend to be around a long time."

The report will be available from AGPS bookshops in early October for $8.95.

Brisbane 30 September 1986

ATTACHED IS A SUMMARY OF THE REPORT'S HIGHLIGHTS. THE AUTHORS WILL BE AVAILABLE TO DISCUSS THE REPORT. CONTACT 'PHONE NUMBERS ARE:

Dr Hal Kendig (062) 49 4608

Dr John McCallum (062) 49 3563/49 2220

Foreword

One of the greatest challenges facing Australian society over the next few decades is likely to he ageing of the population. Because of the profound and far-reaching effects of a rapid increase in the number of aged people, the Migration Committee of the National Population Council commissioned the preparation of this report, which draws together the

growing body of research and information on the subject. One of the aims of this report is to encourage discussion and thereby promote an awareness of the issues associated with ageing in our society. An important point, which 1 emphasise, is that opportunities as well as problems will arise with a rapid increase in the aged population. Often overlooked is the largely untapped resource potential of the aged themselves. It is important that this resource be fully utilised given the challenges,

particularly in the health, social welfare and social security areas, which lie ahead. The National Population Council has been asked by the Government

to provide advice on the relationship between population, immigration and the economy. This report constitutes a valuable resource in assisting the Council in this task. The Government recognises the important role that the community can play in the decision-making process. The National Population Council

fosters this role by promoting an awareness of population matters. 1 hope that this report stimulates discussion in the community and in so doing contributes to an informed discussion of Australia’s long-term future.

Chris Hurford Chairman, National Population Council Minister for Immigration and Ethnic Affairs February 1986

Highlights

1 Introduction

2 Australian « population » « ageing »

3 Who are the aged?

« Population » « ageing » is almost inevitable. The consequences of demographic change will depend on choices and circumstances in the future, and the earlier life experiences of older people. The increased numbers of older people will present major opportunities as well as problems.

« Population » « ageing » — the increasing numbers and relative size of older age groups in the population — is the result ot changes in fertility, mortality and migration. It indicates the demographic maturity of a population and is occurring in all the developed countries of the world.

Australia is experiencing rapid « population » « ageing » . The numbers of persons aged 60 vears and over are expected to increase from 2 million in 1981 to 3 million in 2001 and 5 million in 2021.

The pace of « population » « ageing » will accelerate in the next century as the baby boom generation reaches old age. The proportion of the population aged 60 years and over is expected to increase from 14 to 22 per cent between 1981 and 2021.

By 2020 men can expect to live another nineteen more years after they reach age 60 compared to another seventeen vears in 1981. Women can expect to live another twenty-seven vears after age 60 in 2020 compared to another twenty-two years in 1981.

'Fhe dependency burden, namely, the numbers of aged relative to the working age population, increases steadily until 2001 and rapidly from 2011 to 2021. These increases could vary depending on changes in fertility, mortality and migration but large deviations from the expected numbers arc unlikely.

The age structure of the older population will change significantly over the decades ahead. During the 1980s and 1990s, the most rapid increases will be among those aged 75 years or over, with the numbers nearly doubling in this age group. From 2001 to 2021, growth will be

concentrated among those aged 60 to 64 years, increasing by nearly 70 per cent. Women will continue to outnumber men by nearly two to one among those aged 80 or over, up to and beyond the next century.

The personal resources of older people will rise in the future due to improved education and employment opportunities during the post-war vears. By the year 2010, a substantial majority of matried women entering old age will have had paid work throughout their adult lives.

Migrants from non-English speaking countries will increase from 11 per cent of the population aged 60 years and over in 1981 to 22 per cent in 2001.

IX

4 Family and social life

5 Housing

6 Work and retirement

7 Retirement income and expenditure

Ncaily thuv-foui tlis ot men hui less th.ii) linlf of women now are married in old ape. The number of people who have ever married will be increasing but more of them also will be divorced or widowed. The proportions ol older people having had children will increase to

90 per cent over the next lew decades, and then fall to 80 per cent next century. The emotional and social bonds between aged parents and their adult children usuallv are strong and enduring. In many areas of life, older people arc more likely to give than to receive

assistance. The ability to contribute will increase along with personal resources in the future.

Over 90 per cent of older people live in the community, and only about 5 per cent of them live in the home of one of their children. Increasing numbers will be living alone in the future. Mome ownership rates approach 80 per cent among older households, and probably will rise slightly over the next decade. The 10 per cent or

so who rent privately typically face high housing costs as a proportion of their incomes. Four out of every live older households now live in separate houses,

and the proportion is unlikely to fall very quickly in the future. Most enjoy the living space but problems can arise with maintenance and gardening. Increasing numbers of older people will be living in suburbs built for

private cars. This will increase their already severe difficulties with transport.

Recent trends to earlier retirement have made more time available for late life leisure activities. In 1947 about one-third of men aged 65 years and over were in the workforce, compared to one-tenth in 1984. Only older married women arc expected to increase their rates of

participation it) the workforce. Single older women and older men are expected to reduce participation even more in response to increased wealth and improved retirement benefits.

About 80 per cent of older Australians receive some pension payment and the rates may increase with the growth in numbers of ‘old’ old (75 years and over) to 2001. Increasing rates are not expected to create any financial crisis but income support policy for the years 2011 to 2021 may

require more radical policy responses, such as raising pension ages. Private superannuation in Australia is primarily paid out in small lump sums and seldom provides long-term retirement income, leaving retirees with minimum incomes. Proposals for improvement in coverage through

industry superannuation are liable to increase the numbers in the workforce who arc covered by such plans. I ’he growth in numbers of elderly, despite their relatively low incomes, implies an increasing importance as consumers. Roth improvements in

income and in marketing for older consumers arc needed to improve the lifestyle of retired Australians.

8 Lifestyle implications

9 Longer life and better health

10 Community care

11 Impact on public expenditure

As people age, activities outside their homes, such as sports, arc replaced bv activities inside their homes, such as watching television. Generally, the same lifelong interest in a particular activity is being satisfied by different means.

Value differences between age groups are explained bv differences in the life experiences of generations and by changes in people as they grow older. Younger people are less religious than older people and new immigrants have fewer who hold Christian beliefs. This suggests that there will be different patterns of religious behaviour among the aged in future vears.

While aged Australians are not typically frail and ill. they arc more prone to illness than vounger groups. Thev also use a large proportion of institutional beds, medical services and medicines. The numbers of older people in institutions and the numbers with

disabilities arc expected to grow because of the growth in numbers of the ‘old’ old. But the size of increases depends on the answer to the vexed question whether or not the aged are becoming healthier. Regardless of the answer to this question the costs of health care in an ageing society

will rise because of increases in numbers of elderly and increasing costs of medical staff and technology.

The majority of older people manage independently in the community, but needs for care will increase along with the expected increase in the numbers who are disabled and widowed. The first and dominant source of support is family. The ability of daughters to continue as the mainstay

of support in the future could be reduced by their higher labour force participation. Paid help with transport and home repairs is already important, and probably will be used more in the future.

Publicly funded services are currently provided for only 7 per cent of the aged, although use could be much higher in the future if funding were increased.

Expenditure by Commonwealth and State governments is on an average twice as much for every older person as for every younger person. « Population » « ageing » will increase government outlays on the aged by 131 per cent between 1981 and 2001, assuming a continuation of current

funding arrangements. The comparative decline in the numbers of children in the future is not expected to yield sufficient savings on government expenditure to cover the additional public costs of « population » « ageing » .

XI

12 Choices for Given uncertain economic prospects, there is a strong case for individuals the future and governments to pnv in advance for more of the costs of old age. Increased superannuation and home ownership among the middle aged today would reduce the financial demands of an ageing population next

century. The 1990s could well see a crisis in care for the disabled aged. Investment in improved residential care and expanded community services would minimise the problems.

Judging from past experience, policy development probably will be influenced more by economic conditions and political priorities than by demographic ageing. The political power and social impact of the aged are already increasing, and will become most forceful next century when the baby boom cohort

reaches old age.

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