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What crisis?

The population is ageing. In 40 years, seven million Australians—a quarter of the population—will be aged 65 or older. The number of people aged 85 or older will have reached about 1.4 million, up from about 300,000 today. Children will be a far smaller proportion of the population.

So what’s the answer to this as a public policy dilemma? Start building more health facilities and nursing homes to deal with the demographic shift? Or build more schools and increase one’s investment in the education that the younger people have?

The second answer is the logical one, though not necessarily the one that leaps to mind. So far as the ageing of the population means that there will be greater pressure on the community to look after the old, the ones who will be bearing the burden will be the working population.

But that’s not the answer invited by those who are putting demographic shift on the agenda, and seeking, in the process, to fashion themselves as far-sighted politicians thinking of the longer term rather than short-term gain. The answer for them is that the slow, if steady, shift to an ageing population represents a ‘crisis’, requiring that government pull in its belt now so that it will have the money on hand later to deal with the massive costs and changes to the system that will be necessary. Otherwise, the implication is that there will have to be higher taxes, uncontrolled costs running far faster than economic growth, and, of course, an increasing burden placed on an ever-diminishing workforce.

It’s all 24-carat, copper-bottomed, ocean-going nonsense. The best thing to do about the ageing of the population is nothing. Or at least nothing on that account. There is no crisis in prospect, no threat of a burden that the community or the economy, as we know it, cannot absorb, and much more to look forward to about an ageing population than there is to fear. And that is assuming that we can safely forecast the future, based on what we know today, or that projections about the size and composition of society and the economy based on what is happening

Indeed, one of the greatest problems of the new, older society, is scarcely mentioned. Even now, most of the wealth of Australia is in the hands of the old. As we get older and live longer, the proportion increases at a rate faster than ageing itself—the old, by and large, will be accumulating wealth at a rate faster than they (or government) is dispensing of it by way of higher costs, particularly in health or pensions. For about two or three generations, Australians have become accustomed to the idea of their natural right to pass on that wealth, by gift or by will, to their children. In the new society, those children may, on average, be of pensionable age and asset-rich themselves, by the time they inherit. In time the pressure to liberate some of these resources, probably by land taxes, will become unbearable, one might think.

Of course, about 30 per cent of the older population will never have bought their house, or put any substantial asset away, and will have no money to leave. But even less does their more modest consumption, even if financed by the state, represent any enormous burden on public resources.

But an older population is by no means a threat. Nor is there any serious prospect that most of us will be Alzheimic dodderers gibbering away in nursing homes. The general population will be ageing, after all, because our society is healthier and living longer, and because modern technology makes active living easier. The modern nature of work, moreover, means that we still can work easily enough, if we want, long after a time when, previously, we were simply past it. The pensionable class of 2045 will in any event be, on average, well-educated, well-travelled and engaged with the world. What bliss to have some spare
time, at last, and what an impertinence to call the personally productive use of it a burden on society.

We are also ageing because a significant proportion of my generation and an even greater proportion of the generation below me has decided to have no kids, or fewer kids than their parents, or have decided to have kids, but later, then never got around to it or found that they no longer could. That’s sad, and probably beyond the power of any immigration program to remedy. But even the prospect, further down, of an actually declining population, hardly presents a crisis either.

Fewer than one per cent of Australians now produce about five times more food than Australians can consume, and many more commodities than we need. Even before 2045 we may reach a stage where we have more televisions, mobile phones and motor cars than we want, and can think only of services, or things such as education and travel, as a way of spending the money burning holes in our pockets. Some of us may even think of sharing our wealth with some of our brothers and sisters not so well off.

Those who are raising the question as a problem, or as an impending crisis, are softening us up for a broader agenda, of cutting the social welfare bill as a way of diminishing the size of government, now as much as in the future. That might be a good thing in itself, but whether it is or is not does not turn on whether the composition of the population will change over time. 

Jack Waterford is editor-in-chief of The Canberra Times.



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