Age and disability pensions are not just financial issues

This week's statement from Social Services Minister, Kevin Andrews, that the age pension payment would be spared from the review of welfare spending will be reassuring to the approximately two million individuals who rely on full or part pension payments in their retirement.

This reassurance is welcome, but in its efforts to wind back the growing welfare bill the government must take into account this critical fact: many people currently receiving the age pension would prefer to be in paid work. These are people who are willing and able to work but are excluded from the workforce by widespread age discrimination.

As the government undertakes this year's Interergenerational Report, it should be focusing on how age pension payments could be reduced by ensuring fair access to jobs by people of pension eligibility age.

Research from Deloitte Access Economics shows that an increase of 5 per cent in paid employment of Australians over the age of 55 would result in a $48 billion impact on the national economy, every year.

The welfare review should also consider age discrimination when looking at the levels of payment and the rules for Newstart. They should consider all those older people on Newstart who languish there because employers won't hire them.

Consider the facts: 140,000 unemployed Australians aged between 50 and 64 are currently receiving the Newstart Allowance. There has been a 28 per cent increase in this group over the past three years. Over 55s are likely to be unemployed more than twice as long as Australians aged 25 to 34, at an average of 75 weeks.

Recent research commissioned by the Australian Human Rights Commission explains just how this unsustainable situation occurs.

One in ten businesses surveyed have an age above which they will not recruit – and that average age is 50 years.

Tease out the reasons for this and you find that the attitudes are shocking, based as they are on egregious stereotypes.

Half of business decision makers regard older employees as being at higher risk of redundancy, a belief significantly more likely to be held by smaller businesses. Almost 40% of business decision makers see older employees as less promotable. Around a quarter or more believe older employees have difficulty adapting to change, are difficult to teach new things, are unlikely to have the same technical skills or to stay in the role as long as younger employees.

Yet none of these damaging beliefs reflects the real situation. And research by National Seniors backs this up. Older workers are in fact willing to undertake training and to work in mixed age teams. They are less likely to take sick leave and are the most reliable age group if you consider absenteeism, loyalty, and dedication to tasks.

As the disability pension is also under review, it is crucial that we find out how many older people have ended up on this payment after losing their job.

The reality of this picture is often dire. These older workers are too often people who have been considered too old, spent a heartbreaking couple of years on Newstart getting nothing but knockbacks because of their age, and then suffered a collapse in health that qualified them for disability benefits.

Much of this need not happen. If people could work longer, pay taxes and save more superannuation, fewer people would ever need the age pension. If the government leads the way in tacking age discrimination in the workplace, they will find this approach the most constructive way of reducing those ballooning welfare payments.

Finding savings is not just a matter of slash and burn economics. For this sort of reform to be truly effective and long-lasting, we need to investigate the causes of the current state of play. When we are dealing with people and their lives, we will often find the causes are not merely financial. They are social. They are attitudinal. Age discrimination is a set of attitudes. If we work hard to change these attitudes, we will reap economic dividends.