Intergenerational Report: What Does it Mean for FiftyUps?
I’m taking a break from the day-to-day COVID controversies to focus on our future, the state of the budget in 2061 and what it means for older Australians.
Every five years, the Intergenerational Report, which came out last week from the federal government, seeks to predict the balance of future budgets.
And every time, it seems the bogeyman in the room is the ageing population and the costs we will inflict on everyone else.
The main story in the fifth intergenerational report (read here) isn’t the challenge of climate change nor the horror of home affordability but the simple matter of ratios.
Namely, it’s the ratio of those of traditional working age to those aged over 65. Inevitably that ratio has shifted. In 1982 it was 6.6:1, i.e. six and a half able-bodied to support just one who is ‘retired’. In 2021 it’s 4:1, and in forty years, 2:7.
But while some get into a frothy lather of fear over this seeming unsustainable number, there are other arguments.
Economist Ross Gittins in his Sydney Morning Herald column, reminds us that an economy responds to such changing conditions by its very nature.
He believes predictions that as the total of those of working age shrink and the labour market tightens, then unemployment will fall, and wages will increase to attract workers. Some of whom will be those who might otherwise have retired.
“Employers will no longer be able to afford their prejudice against hiring older workers,” he writes.
Another view that questions some of the fatalistic presumptions of the Intergenerational Report check out last week’s ABC Radio National’s The Economists show.
Indeed, there will be challenges in the future. The most profound ones are generally not predicted, but let’s not assume older Australians are, by necessity, part of the problem.
We must indeed contribute to the solutions. What do you think of the future? Are you likely to be working-aged over 65 if there’s more work available?
Any information contained in this communication is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.