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An ageing Australia
While any forecast in relation to future population size and structure requires assumptions about future levels of mortality, fertility and immigration, it appears that Australia’s population outlook over the next few decades is likely to be dominated by structural ageing.
Ageing presents challenges and opportunities for individuals, families, communities, businesses and governments. The social dimensions may include changes to caring and disability support needs, housing demands and recreation patterns. The economic dimensions are likely to be equally complex. Budget Paper No. 5, The Intergenerational Report, released as a part of the 2002-03 Commonwealth Budget, provides a detailed overview of the long-term sustainability of government finances in the context of structural ageing. The report shows that fiscal pressure on the Commonwealth Budget is expected to build, with the most significant impact first emerging in around 15 years from now. By 2041-42, the gap between spending and revenue is expected to reach 5% of gross domestic product in the absence of any major policy shifts (graph 7.6).
A key to addressing this challenge lies in managing government costs in the areas of health and welfare, as well as maintaining strong economic growth. Critical to this will be future rates of workforce participation, particularly among older workers. Greater workforce participation among older Australians may contain government welfare outlays by improving self-provision for retirement and reducing the risk of older Australians entering long-term income support. In addition, boosting workforce participation rates among older Australians is also expected to help sustain economic growth by offsetting the expected decline in labour force supply.
In many ways the economic and social opportunities and challenges of projected population ageing are inseparable. Public attitudes towards older Australians, either within the workplace or in broader aspects of community life, will be critical to how our society responds to structural ageing. Since most other developed countries are much further down the ageing track than Australia, we are fortunately well placed to learn about how other communities deal with the pressures and benefits of adapting to an ageing population.
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