Some policy suggestions to improve the affordability of retirement

With much-reduced growth in the working-age population in the future, it will be essential that we generate flexible work opportunities for all those who want them - including those who are currently unable to find a job at all, or who are looking to increase the hours that they work. Reducing the amount of regulation imposed on those seeking to negotiate mutually beneficial wages and conditions is the key to this flexibility.

The government has already legislated to remove any age discrimination that exists for employment by the Australian government, and provides leadership in promoting community understanding of the economic and social imperatives of greater participation by mature-age people. The Business Council of Australia has recently issued a guide for supporting older workers, which is aimed at encouraging big business to keep more older Australians in the workforce.

The prime minister has also asked the Community Business Partnership to suggest practical ways to encourage the private sector to employ more mature workers. The Partnership is expected to report back around the middle of this year.

Increased flexibility in the workplace-relations system would allow older workers to choose whether to remain in the workforce for longer in part time work as they approach retirement. A flexible workplace-relations system will also enable older workers to balance caring responsibilities by allowing employees and employers to negotiate mutually beneficial family friendly work arrangements.

A number of further workplace relations reforms are currently proposed: reform of unfair dismissal laws to minimise the impact on employment, particularly for small business; simplification of procedures for agreement-making; improvements to the remedies and sanctions against unprotected action; improvements to bargaining processes; and improvements to the processes for union right of entry to the workplace. These reforms have been blocked in the Senate.

Wage-setting processes also are complicated by cross-jurisdictional issues arising from workplace relations issues being covered by state and Australian government legislation. This can create significant issues for businesses operating in a number of states. Some currently proposed legislation seeks to broaden the federal jurisdiction in workplace relations matters.

Some people argue that we don't need to take steps now to address the ageing of the population. After all, some of these demographic changes have a long way to go before they fully work out.

But just as a demographic change takes a long time to take effect, so too does the policy response. The people who will be carrying the tax system in 40 years time have already been born. There are long lead times in implementing change in the area of their retirement incomes. To achieve worthwhile change in 30 or 40 years time requires action now.