A changing world looks for a fresh approach to meet age-old challenges
SOME perceptive social commentators compare population ageing with climate change as a key challenge in the 21st century. But in the community at large it gets much less than its fair share of attention.
Since the industrial revolution, the world’s population has been growing at an unprecedented pace. Successive and ever larger cohorts have kept the age structure of the population young. This young population has proven to be highly innovative, dynamic, energetic and, until now, growing.
The next 50 years will see this growth reverse, not just in Australia but across the globe. And that will mean slower economic growth. Data from the Australian Bureau of Statistics shows that at Federation, in 1901, 4 per cent of Australians were aged 65 and older; this year it stands at 14 per cent. In Australia, within 10 years, there will be more older people than children, and by 2050 people aged 65 and older will make up 22 per cent of the population. The number aged 85 and older will more than quadruple.
This phenomenon is due to longer lives and declining fertility. The more significant effect is declining birthrates. During the past 50 years, fertility in Australia has dropped from a peak of 3.5 children per woman to 1.9 children per woman, on average. Some countries have seen even more dramatic declines.
In Japan, fertility declined from a post-war high of 4.5 to 1.3 and in China from 6.1 to 1.5. In Japan, not only is the workforce population declining but the overall population has stopped growing. Germany is on the cusp of a similar decline. Even China’s population, which has an age structure that is still younger than that seen in advanced economies, is expected to peak within the next two decades.
John Piggott, director of the ARC Centre of Excellence in Population Ageing Research, says: “The social, political and economic impact of this fundamental shift in the demographic structure of our population is not yet fully understood. The challenges of population ageing go beyond reforming the aged-care system or considering the impact on the budget bottom line. We will need to respond to changes in the structure of our society.”
Although Piggott does not deal with the dangers of rapid, unchecked population growth, the reality is that demographic change, although slow, seems inexorable. And in Australia it is imminent: the first of the baby boomers have started turning 65.
Much public policy discussion on our ageing population has necessarily centred on issues such as aged care.
The Productivity Commission estimates that the more than a million Australians now accessing aged-care services are expected to number 3.5 million by 2050, necessitating immediate attention by our governments.
We need to be fully aware of the looming fiscal pressure this will bring about.
An older population will mean that government spending will rise because of age-related programs: the pension, health, disability payments and aged care.
The ageing of our population is projected to absorb another 5 per cent of gross domestic product by 2050. Spending on aged care alone is expected to more than double, from 0.8 per cent of GDP in 2010 to 1.8 per cent of GDP by 2050. The federal government has several levers at its disposal to relieve fiscal pressure and alter the balance between public and private age-related spending. Our budgets are not predicted to spiral out of control because previous governments have put some of these measures in place, such as extending working lives and, in the case of the federal Labor governments of Bob Hawke and Paul Keating, setting up compulsory superannuation. This is despite the Gillard government making it more difficult for the rich and the old to contribute to super without paying more tax.
But what few politicians and policymakers seem to be considering is the impact that our changed demographics will have on the fabric of Australian society. From our families to our workplaces, to our streets, cities, shopping centres and schools, virtually no aspect of daily life will be untouched by the cultural shift brought about by a population dominated by older people.
There is also an important regional component. In communities where young people have left for the large cities and where active older people live, these demographic shifts could be very difficult to manage. As the rural population ages and becomes frail during the next 20 to 30 years, there could be few young people left in their country town or rural region to support them. Everyday life in cities will change as the people walking our streets become older. They will look different and feel different as handrails become more prevalent, and buses and trains take longer to load. According to data from the UN and the ABS, by 2050 the average age of Australians will be 42. In 1901 it was 22.
A key question Piggott poses is, “What happens in a society where the social energy from a youthful population is no longer there?”
With so much informal care provided within the family unit, spreading that load among one or two children in the future is quite different from sharing the load among three of four, as often happens now. These same one or two children will be relied on to work as well as needing to provide care for family members. Where they may now leave work to pick up their children, they soon may be leaving work to pick up their parents. Or they may be living in another country.
Population ageing is a phenomenon that will certainly come to pass. The question for policymakers and society in general is: How can we prepare effectively for such a fundamental change?
Emeritus professor of history and politics Ross Fitzgerald is the author of 35 books, including ‘My Name is Ross: An Alcoholic’s Journey’, available as an e-book.
The Weekend Australian, February 16 -17, 2013, Inquirer p 19.