The cost of an ageing population

Australia’s age-related spending and long-term care costs will rise significantly by 2050, according to an international report.

 Population ageing will put pressure on Australia’s economy this century, according to a new report from global ratings agency Standard & Poor’s.

According to the data, the proportion of Australia’s GDP devoted to age-related spending would jump from 9.6 per cent today to 14.4 per cent by 2050 if there were no major changes to current policy.

While the projected increase in age-related spending is significant, the report said Australia is better placed than most other developed countries to meet the needs of an ageing population.

It is expected that age related spending will account for 18.5 per cent of the UK’s GDP and 23.7 per cent of the USA’s GDP by 2050.

The report also said that the proportion of Australia’s GDP devoted to long-term care would more than double to 1.8 per cent by 2050, based on current trends.

“No other force is likely to shape the future of national economic health, public finances, and national policies as the irreversible rate at which the world’s population is growing older,” said Standard & Poor’s credit analyst Marko Mrsnik.

The figures in the report are based on a projection of current policies and age-related spending patterns into the future.

However, the paper’s authors said it was highly unlikely that governments would allow debt and deficit burdens to grow unchecked.

Previous reports from Standard & Poor’s have described the current decade as a “window of opportunity” for governments to respond to the challenges of an ageing population.

Tags: ageing-population, policy, spending, standard-and-poors,

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