Opportunities and challenges

AN ageing population is a phenomenon common to many of the world’s developed countries. 

For Australia, however, the experiences of other countries in dealing with the problem should provide a timely warning because the real impact of an ageing population is yet to be felt here.

As is the case in the US and New Zealand, Australia’s population is slightly younger than other developed countries, with only 16 per cent of people aged 60 or over.

However, driven by the large baby boomer demographic group, the number of retirees is set to swell, posing both challenges and opportunities for business and government.

In Australia, the first of this large demographic group, which resulted from increased levels of immigration and birth rates from 1946 to 1965, is expected to start retiring soon.

There is much speculation about how both government and business will cope with the effects of having large numbers of people out of the workforce.

In comparison to many of the other States, WA is well placed. According to 1997 ABS figures, 11.7 per cent of the WA population fell into the seniors bracket, whereas in Tasmania it was 18.9 per cent, 14.8 per cent in South Australia and 13.4 per cent in New South Wales.

By 2020 almost a quarter of the population in WA will be aged 60 or over, a population profile that will prove challenging for both current and future governments. Baby boomers are often represented as an affluent, socially mobile, active demographic that has worked hard, saved for the future and plans to enjoy retirement.

However, despite the introduction of compulsory savings for superannuation in 1992, there appears to be a large number of baby boomers with low levels of superannuation savings.

Figures from the 2000 Survey of Employment Arrangements and Superannuation show that 17 per cent of pre-retired baby boomers had no superannuation and a further 38 per cent had less than $20,000. Only 8 per cent have more than $100,000 in superannuation. 

Both government and business will be placed under pressure if levels of superannuation are insufficient to provide for baby boomers when they retire.

Council on the Ageing executive director Nigel Barker said there was a growing need for mature workers, particularly women and workers with broken employment records, to be given the opportunity and incentive to work up to retirement.

“Given the increased life expectancies, the statutory superannuation guarantee of 9 per cent is hopelessly inadequate. People should not assume that this is going to keep them in a reasonable lifestyle for the future,” he said.

But the changing demographic poses opportunities as well as challenges. It’s speculated that the baby boomers will cling to their youth like no other group before them. Those who have prepared well financially will have money to spend on themselves, yielding benefits for a range of businesses.