Still Kicking: Longevity and Ageing. The demographic climate change of our time.
By Emily Millane
1.8 million people aged over 85 in 2050. One in four people aged over 65 by 2056. Life expectancy at birth rising by 25 years in the last century. One million people with dementia by 2050. 85,000 more aged care places required in the next decade. Get the picture?
None of this is news. We have known about the trends in ageing and longevity for a while now. We are, however, still immersed in a social structure which is designed for lives shorter than the ones we are living.
This paper argues that increasing longevity and an ageing society together represent the demographic climate change of our time. We have started to see their effects. Without prompt and considered action on a number of fronts – political, social and economic – we risk a loss to our quality of life. For example, by delaying intervention it may mean that future adjustments to rein in the fiscal impact of ageing need to be done over a shorter period of time, making the impact of these policy measures more keenly felt.
We also risk losing our social compact. On current policy settings, governments will not be able to fully provide for the pensions and health costs of a burgeoning older population. There will be growing inequality between those with high retirement savings and those without. The people whose retirement savings will be most inadequate are predominantly women, the low-paid and casual workers.
The paper looks at how a number of significant social changes, both before and during the lives of the baby boomers, have produced specific policy challenges. The contraceptive pill liberated women but also created a lower fertility rate, which has had a direct impact on the old age dependency ratio , which means fewer working Australians to support the older population. Similarly, a greater acceptance of divorce, together with greater numbers of people not marrying and not having children, will have implications for the structure of families and potentially also contribute to an increasing number of people living alone.
The paper considers the income, expenditure and debt positions of older Australians and finds that post-retirement income is too low. Superannuation and the aged pension together are not ensuring a comfortable standard of living for Australians living longer life spans. This will also apply to younger Australians, even though they will have had the benefit of compulsory superannuation across their entire working lives. The paper looks at work and retirement patterns and the way that older Australians are working longer, possibly due to better health and but most likely because of a realisation that they simply need to keep earning to boost insufficient retirement savings.
Next, the paper describes the key trends in health and aged care, finding that older Australians are spending more on their health – they may be living longer than previous generations, but they are paying for it. The paper looks at the specific impact of dementia and chronic disease on different groups in Australian society, including migrants and male carers. It also finds that the aged care sector requires a significant boost to the numbers and capabilities in its workforce.
Finally, the paper considers the multiple responsibilities of older Australians. They provide financial and emotional support to children and grandchildren. They are often carers. And they are active participants in their communities.
The paper concludes by arguing that despite the snowballing effects of ageing and longevity, we are armed with the policy tools to arrest their detrimental effects. It outlines six areas where policy innovation could in fact lead to new business opportunities, greater prosperity and a higher quality of life for older Australians.