A rudderless ship: government's older worker policy

Writing reports is an industry in itself. Whether anyone reads them and acts on the findings is another matter. Rarely has a social and economic phenomena generated so much paper and website content with so little result.

Exhaustive reports by National Seniors, the Consultative Forum and the recommendations of the Advisory Panel on the Economic Potential of Senior Australians,

comprehensively documented what needs to be done.The fact is, no one is doing it. We just get more reports.

Four factors are at work:

1. Australia's economy is slowing

2. People are living longer

3. Birth rates are falling so the tax base will shrink - even with high immigration

4. The problem seems a long way off, although we are at the leading edge now.

According to the Productivity Commission Research Paper (Nov 2013), 'An Ageing Australia: Preparing for the Future', labour participation rates are predicted to fall from 65 to 60 per cent from 2012 to 2060, and overall labour supply per capita to contract by 5 per cent.

"Average labour productivity growth will fall 1.5 per cent per annum from 2012-13 and per capita income is expected to drop to 1.1 per cent per annum compared with an average growth rate of 2.7 per cent over the last 20 years."

"Federal and state governments will face additional pressures on their budgets equivalent to around 6 per cent of national GDP by 2060, principally reflecting the growth of expenditure on health, aged care and the Age Pension" the report said.

A 6.0 per cent impost on GDP (currently $1.5 trillion) works out on a rising scale to about $25 billion per annum by 2060. While GDP is projected to grow to $2.6 trillion by 2030, the bad news is we don't have now, or projected in to the future, anywhere near that sort of revenue.