In the past few days, two reports from the Productivity Commission and Grattan Institute have suggested a number of policy responses to our ageing population.
The Productivity Commission has discussed increasing the retirement age to 70 and the ways in which personal assets and equity can be used to pay for aged care. The Grattan Institute examined lifting the age at which both the aged pension and superannuation can be accessed to 70, and the potential for owner-occupied housing to be included in the assets test for the aged pension.
There's a sad irony that these reports have come out so soon after the Coalition's decision to cut the Advisory Panel on Positive Ageing, which had been tasked to work with the Government on implementation and design of ageing policy.
A discussion about our ageing population needs to be had, but it needs to focus on how we can ensure that people have employment, savings and support in order to enjoy a decent quality of life as they age. Keeping people happier and healthier puts less pressure on our health, aged care and social security systems.
Newly released data from the ABS suggests that by 2040, the number of people age 65 or over is projected to double to 6.8 million, while the number of people aged 85 or over will almost triple. An ageing population isn't a crisis, but these figures show us that unless we identify and act on the issues that are affecting older Australians today, those same issues will compounded and magnified over the coming years.
One of the most critical issues in need of attention is employment. So-called ‘older Australians' - in this case people as young as their 40s- are finding it increasingly hard to re-enter the workforce. One in three people looking for work on Newstart Allowance is currently aged over 45, and people in this cohort find themselves stuck on Newstart for significantly longer than younger cohorts.
The number of people aged over 45 on Newstart has increased 28% in the last three years.
I hear constant complaints that Employment services aren't providing enough support and mechanisms to re-train and re-skill workers in their 40s and beyond.
To compound matters further, ageism and age discrimination is increasingly locking people out of work. The recent Fact or Fiction report from the Human Rights Commission found that one in ten employers routinely reject older applicants. This attitude is making it increasingly hard for people in their late 40s and 50s to find work, let-alone those in their 60s and 70s.
The cumulative result is that people are coming onto Newstart and are struggling to get off. During this time they're relying on an income support payment that is more than $130 per week below the poverty line, and rent assistance that doesn't go close to meeting the real cost of accommodation.
People fall back on the last of their savings or super to make ends meet.
This creates the real potential for this group to face older age without the savings, superannuation or equity they'll need to pay for their housing and aged care. Entrenched inequality and poverty has serious impacts on mental and physical health and in turn creates significant costs for our health services.
If people are already facing these structural issues around employment, then any policy change that lifts the retirement age will likely see more and more people stuck in poverty in the years before they retire.
The issue of extending the retirement age also goes to individual capacity. While many Australians continue to work in a full time, part time or voluntary capacity well after retirement age, not everyone can. People in labour-intensive jobs, manufacturing, trades and so on may simply be unable to keep working.
This situation, which exists now and is a growing problem, casts the Prime Minister's decision to cut the low income superannuation contribution and supplement payment for people on Newstart in an especially cruel light.
Targeting vulnerable people to address future revenue needs rings especially hollow, given legislation to repeal the mining tax on massive resource companies is currently before Parliament.
It also, along with the axing of the Social Inclusion Board (established to help Government address the underlying factors contributing the growing level of poverty in our community) shows a distinct disinterest in fixing serious social issues we're facing today, just as the decision on the Panel on Positive Ageing shows a lack of commitment to address the issues we'll face in the future.
Before examining changes that go to retirement or superannuation age, we need a full investigation into the impact of such moves and action to address the challenges already facing older Australians.
We need political leaders that understand the importance of taking responsibility today for the issues that will arise in the future. This needs to start with steps to help Australians back into the workforce and address the inadequacies of our employment services, while at the same time protecting people from the prospect of retiring in poverty.
Originally published in The West Australian on Friday 29th November 2013.