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Push to keep older Australians in the workforce has split peak bodies

Australian Treasurer, Josh Frydenberg, has proposed upskilling older Australians to keep them in the workforce for longer, which has caused division between peak bodies, with one supporting and another against the suggestion.

​Minister Frydenberg believes the impact of a growing number of older people in Australia will have an effect on the economy. [Source: Shutterstock]
​Minister Frydenberg believes the impact of a growing number of older people in Australia will have an effect on the economy. [Source: Shutterstock]

Minister Frydenberg addressed the Committee for the Economic Development of Australia in Sydney on Tuesday night proposing a solution to the “challenge of an ageing population”.

He believes the impact of a growing number of older people in Australia will have an effect on the economy, so to offset that problem, he says there needs to be an increase in older Australian’s working for longer.

“While we navigate our way through these choppy international waters, Australia like many other countries around the world, is working through longer-term structural economic challenges, in particular, that posed by the ageing of the population,” says Mr Frydenberg.

He provided statistics that the ageing population across the world, aged 65 and over, by 2050 will double to 16 percent.

Mr Frydenberg believes the number of working age Australians for every person aged over sixty-five will diminish and impact the Australian budget in both revenue and spending.

“In a report published by the Parliamentary Budget Office (PBO) earlier this year, it is estimated that the ageing of the population will reduce annual average real growth in revenue by 0.4 percentage points and increase annual average real growth in spending by 0.3 percentage points over the decade,” explains Mr Frydenberg.

“In dollar terms, this equates to an annual cost to the budget of around $36 billion. As the PBO point out, this is more than the projected cost of Medicare in that year.

“As our ageing population puts pressure on our health, aged care and pension systems, we need to develop policies that respond effectively to this challenge.”

Mr Frydenberg states that workforce participation among people aged 65 and over is on a record high, with an increase from 12.3 percent to 14.6 percent over five years.

He says the current problem with the older workforce is that 80 percent received training before they were 21, and require more skills training for the future.

Mr Frydenberg was adamant that this move is not going to force more people in the workforce, “rather giving them the opportunity and the choice to pursue life-long learning and skills training if they so choose”.

Council on the Ageing (COTA), peak body for older Australians, supports the Treasurer’s call for this policy approach for the future of the older population.

Ian Yates, Chief Executive of COTA, believes the fact Australian are living longer is a positive achievement that brings positive opportunities and challenges.

“This isn’t about forcing people to work longer than they want to or are physically able to, it’s about supporting Australians to work longer who choose to do so, and creating and capiltalising on opportunities for them to do so,” says Mr Yates.

“A significant proportion of people aged between 65 and 75 are still working and more would do so if age discrimination and lack of support weren’t such barriers to remaining in the workforce, often from the 50s onwards. 

“People work longer for many reasons, whether that be financial freedom, professional satisfaction or staying engaged socially and they should be supported to work as long as they choose to.”

Mr Yates believes employers will benefit from an age diverse workforce, but there needs to be more action to combat ageism and discrimination by employers.

He says this requires a cultural shift among Australian business owners and employers to stop the spread of ageism.

“At least 30 percent of employers admitted to the Australian Human Rights Commission last year that they would not recruit workers over 50, which is morally reprehensible and entirely illegal,” Mr Yates says.

“We also need a coordinated set of workforce measures to support people to develop skills, retrain for new careers, find new work opportunities and incentivize employers, building on the good start in the 2018 Budget’s “more Choices for a Longer Life” package”.

In stark contrast to COTA’s views, another consumer advocacy group, National Seniors Australia, believes Mr Frydenberg suggestion "does not reflect the true facts about the ageing population”.

Chief Advocate for National Seniors, Ian Henschke, says the Treasurer may be “unintentionally engaging in ageism by implying the older generation is somehow a problem and a burden”.

“We’ve heard this before in descriptions like ‘tidal wave’ and ‘tsunami’. Rather than stigmatise older Australians, we should blame previous treasurers from 1980 who have stood by and watched this happen,” says Mr Henschke.

“Let’s deal with the facts, for example, that older Australians are wanting to work more and longer but they are not getting the work they need. When they do retrain, we know they are experiencing discrimination.

“Training and retraining costs money and despite the Government offering incentives of $10,000 to employers who take on the over 60s, the largest cohort on Newstart is the over 55s.

“Let’s also not forget the many older Australians caring for other older people and their families.

“The second major point the Treasurer needs to address is the fact that the last intergenerational report got its predictions wrong.

“Contrary to the view that the pension costs to the nation will grow, the evidence shows that quite the opposite will happen and is happening.”

Mr Henschke pointed to future modelling released by Rice Warner, an actuarial firm, showing that over time, more people will be self-funding their retirement and the population receiving the pension will fall.

The peak body for non-profit aged care providers, Aged and Community Services (ACSA), welcome the Treasurer’s acknowledgement of the economic and societal challenges facing the ageing nation, but can’t keep recommending “band-aid solutions” for current problems.

ACSA Chief Executive Officer (CEO), Patricia Sparrow, says, “Australia can kick the can down the road and face the consequences, or we can reimagine our economy to include older people and help them live better and longer in the process.

“As we live longer and better than ever before, our ageing population is actually a huge opportunity. To harness that we need to end discrimination, level the playing field in health care and make sure that everyone plays a role in planning for their own ageing.

“It’s good that the Treasurer is acknowledging these issues, but more funding band-aids won’t fix them. We need big picture thinking that is lacking in the current debate.”

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