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Population ageing has received a great deal
of political and media attention in recent years. The ageing
of Australia’s population
will affect several policy areas, most notably health, aged
care, superannuation and social security, and welfare assistance.
To enable the best policy responses, it is imperative that ageing
in the Australian context is understood, especially the facets
of ageing that policy can influence as well as those it cannot.
Numerical ageing
Numerical ageing is the absolute increase
in the numbers of elderly. It is caused by an increasing number
of people living to older ages because of better health care.
Barring any major changes in death rates, numerical ageing in
Australia will be dramatic
over the coming decades. The Treasury estimates that the number
of people aged 65 and over is projected to more than double
between now and 2047—rising from 2.8 million in 2007 to 7.2
million in 2047 (see the following table).
Australian population: history and
Treasury projections
|
Age range |
1967 |
2007 |
2017 |
2027 |
2037 |
2047 |
|
Population as at 30 June (millions of people) |
|
|
|
|
0–14 |
3.5 |
4.0 |
4.1 |
4.2 |
4.3 |
4.3 |
|
15–64 |
7.3 |
14.1 |
15.2 |
15.9 |
16.4 |
17.0 |
|
65–84 |
0.9 |
2.4 |
3.4 |
4.5 |
5.3 |
5.6 |
|
85 and over |
0.1 |
0.4 |
0.5 |
0.7 |
1.1 |
1.6 |
|
Total |
11.8 |
20.9 |
23.2 |
25.3 |
27.1 |
28.5 |
|
Percentage of total population |
|
|
|
|
|
0–14 |
29.3 |
19.1 |
17.7 |
16.7 |
15.7 |
15.0 |
|
15–64 |
62.2 |
67.4 |
65.6 |
62.7 |
60.7 |
59.7 |
|
65–84 |
8.0 |
11.7 |
14.5 |
17.8 |
19.4 |
19.7 |
|
85 and over |
0.5 |
1.7 |
2.2 |
2.7 |
4.2 |
5.6 |
|
Total |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
100.0 |
|
Number of working age (15–64) people for every person
65 and older |
|
|
|
7.3 |
5.0 |
3.9 |
3.1 |
2.6 |
2.4 |
Source: Australian Government, Intergenerational
Report 2007, p. 16.
Structural ageing
Structural ageing reflects the increasing
proportion of older people in the population. The fertility
rate has fallen over the last half century, although it has
stabilised in the past decade. This decline in the fertility
rate has resulted in a smaller proportion of the population
being young and a larger proportion being old. In turn, this
has resulted in a rise in the aged to working-age ratio—that
is, the number of people aged 65 and over in proportion
to people of traditional working age (15–64). This is a fairly
blunt measure, as not everyone aged 15–64 is working, and not
everyone aged 65 and over is not working. However, it is
a useful tool to measure ageing trends. In the Intergenerational
Report 2007 (see separate brief), the Treasury projects
that the aged to working-age proportion will rise from 20 per
cent in 2007 to over 42 per cent in 2047. To put it another
way, as shown in the above table, there will be a fall from
five people of working age to every person aged 65 and over
in 2007, to only 2.4 people of working age for each person aged
65 and over in 2047.
In reality, both numerical and structural
ageing are happening simultaneously in Australia.
Increased life expectancy means that there are a large number
of baby boomers (currently aged 42–61) who will live longer.
Combine this increase in the number of older people (numerical
ageing) with the proportionally smaller number of younger people
(due to declines in the fertility rate), and structural ageing
is the result.
Policy responses
Numerical ageing in Australia
is unavoidable, and it is important to understand and be prepared
for the inevitability of a greater number of older Australians
in the coming decades. Policy responses to structural ageing
must focus on dealing with the impacts, such as increased demands
on health and aged care, and the subsequent increases in costs
in these and other areas. Approaches that encourage continued
workforce participation of older people and marginalised workers
are also important to help mitigate some effects of the ageing
of the population.
Structural ageing, however, is amenable to
influence, although realistically only to a small degree. In
the medium to long term, increasing Australia’s
fertility rate, or at least preventing further decline, will
slow the process of structural ageing and may be a worthwhile
goal. That said, it will take decades for any increase in the
fertility rate to lead to more persons of working age, and there
would also have to be a very significant increase in the fertility
rate to make a large impact.
Migration is another factor that can influence
structural ageing by bringing in more working-age people, but
this option is subject to some limitations. Over time, permanent
migrants also will grow older, and will thus further increase
the aged population—although this can be partially or totally
offset by these migrants having children. Attracting young skilled
migrants to Australia
will become more difficult as international competition for
skilled migrants increases. Further, for Australia
to have net positive migration, the number of migrants to Australia
needs to be larger than the number of people leaving. Just as
Australia is facing competition in attracting skilled migrants,
skilled Australians will also be targeted to emigrate—possibly
making net positive migration more difficult to attain.
Library documents
Jeffrey Robertson, ‘Global
ageing: economic implications for Australia’, Research
Note, no. 46, Parliamentary Library, Canberra, 2004–05.
Tony Kryger, ‘Australia’s
ageing workforce’, Research Note, no. 35, Parliamentary
Library, Canberra,
2004–05.
Documentation
Australian Bureau of Statistics, Population
Projections Australia, 2004 to 2101, cat. no. 3222.0,
ABS Canberra, 2005.
Natalie Jackson, ‘Population
ageing in a nutshell: a phenomenon in four dimensions’,
People and Place, vol. 15, no. 2, 2007.
Australian Government, Intergenerational
Report 2007, Commonwealth of Australia,
Canberra, 2007.
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