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Population ageing only half the story

By Malcolm King - posted Friday, 14 February 2014

The Federal Government said it is not considering raising the eligibility age for the aged pension, which means it's in the pipeline for 2015/16.

This was a key recommendation of a recent Productivity Commission (PC) report and one suspects that the Commission of Audit is not far behind them. Some of the PC reports read like they were written by Scrooge in Dickensian England. They lack an understanding of the changes running through Australian workplaces.

The main strategy of the Federal Government to combat a population ageing, is to move the age pension further and further away from the citizen's whose taxes paid for it. The Gillard Government has already moved the age eligibility to 67 years of age for men and women by 2023.


There is no doubt that the gap between revenues and expenditure in the health and aged pension budgets will widen over the next 30 years. We've known that since the mid 1980s. It's one of the reasons why the Keating Government introduced universal superannuation, so we could fund our own retirement. It will certainly benefit those born in the 1970s and later.

The Productivity Commission warned the longevity of Australians has been underestimated and that taxes would need to rise 21 per cent unless steps are taken to pay for Australia's extra health and aged-care costs. This is absolute rubbish. Every one dies and the main outlays for the aged is home nursing care, medicines and GP consultations.

While the Productivity Commission research report, An Ageing Australia: Preparing for the Future, predicts national income growth will drop from 2.7 to 1.1 per cent per capita over the next 50 years, that is due to a host of macro and micro economic forces – not just population ageing.

There are even calls for the Government to raise the preservationage (the age at which you can access your super), and the Age Pension age to 70 years, to balance the budget. Some also want the family home included in the Age Pension assets test. Is that what the Treasurer is talking about by ending the age of entitlement? Does he mean the end of elderly people owning their own home?

Too bad if you're elderly, female and your husband is dead. Where are you supposed to live? Women in general have accrued very little super. There has been little to no discussion on flexible workplaces for parents and older workers. That's the future. Purely economic solutions are pointless without providing the infrastructure and social support necessary for fundamental economic and social change.

If you're 55+ in SA or Tasmania, and out of a job, the chances are, unless you move interstate, you will be out of work permanently. I run a small professional writing and recruitment coaching business, and over the last five years we have gone from seeing three or four clients a month to about 30. Some want help. Many just want to talk. I have not seen anger and indignation like that before. It's hard enough finding a job if you're 25. But if you are 45-70 and you have the recruitment industry against you, what chance do you have? Unemployment, whether old or young, kills dreams and marriages.


According to the Australian Bureau of Statistics, 51 per cent of men and 42 per cent of women, say the most commonly reported source of personal income when people retire is the age pension. This presupposes they know how much money they need to retire. As people move into their retirement years this figure rises - almost 66 per cent of people who have retired say the pension is their main source of income.

The fact is that most working people 50+ don't know how much they need to retire. It's true that the Boomer generation will live longer than their parents. It's also true that they will need much more money to retire that their parents did.

Many older Australians are living on basic incomes. At the last census, 67 per cent of men and 76 per cent of women aged over 65, were living on less than $600 a week from all sources of income, or about $31,200 annually. According to the Association of Superannuation Funds standard, it costs a single person about $41,830 a year to fund a comfortable retirement. It's about $60,000 for a couple. That's why I am 'gung ho' for people to see government financial service people at the Commonwealth Government (out of Centrelink). It's free.

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About the Author

Malcolm King is a journalist and professional writer. He was an associate director at DEEWR Labour Market Strategy in Canberra and the senior communications strategist at Carnegie Mellon University in Adelaide. He runs a writing business called Republic.

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