Australians have been told there will be too few younger people to pay the taxes to support an ageing ‘tsunami,’ putting an unsustainable financial and care burden on future generations.
However, a recent research discussion paper commissioned by Sustainable Population Australia (SPA) and written by Queensland University academic Dr Jane O’Sullivan attempts to debunk that ‘doom and gloom’ scenario.
Rather than being a threat to the economy, Dr O’Sullivan argues that those with vested interests in population growth, including property developers and large retailers, have overstated ageing concerns in order to make high immigration seem essential.
Her report, which expresses SPA’s opposition to population growth, claims Australia is still in the last stages of the demographic transition where the proportion of older citizens rises steadily.
However, this is only a transition to a new stable level where the proportion of people over 65 will settle at around 28-33%, depending on life expectancy and whether our population stabilises or even gradually reduces in size.
At no point, the report asserts, will over-65s outnumber younger adults.
Sustainable Population Australia welcomed the discussion paper, saying it allows policy-makers to look at the population ageing issue from a new perspective – not from one of anxiety but rather as a good news story.
The discussion paper finds that federal government policies to boost population growth through higher immigration and incentives to have more children, such as the baby bonus, do not prevent ageing in the long run.
On forecast increased health costs, Dr O’Sullivan says the rise in the proportion of older citizens accounts for a small fraction of the projected costs. Most of the increase is due to new, improved and additional services per person.
“Longevity has deferred, rather than extended the period in which the elderly need more healthcare and aged care.
“High levels of immigration can slow, but not prevent, population ageing. But the cost of extra infrastructure and education to sustain population growth is greater than the avoided costs of pensions, healthcare and aged care,” she says.
She says economic models that predict less economic activity as the population ages are based on false assumptions. The Parliamentary Budget Office estimates that ageing will cost the Federal Budget “around $36 billion by 2028–29”. Dr O’Sullivan says that estimate wrongly assumes that a smaller working-age proportion of the population would mean less economic activity, and that health and aged care costs rise in proportion to the over-65 population.
The countries with the most elderly people don’t have fewer workers than us, just less unemployment.
The paper calls for a societal and political reframing of ageing, replacing panic with optimism and potential.