Time for action on an ageing population

Raising the pension age without addressing age discrimination and the structural issues which lock a significant number of people out of employment risks further entrenching inequality and poverty in old age, writes Senator Rachel Siewert.

The newly released Productivity Commission report An Ageing Australia: Preparing for the Future helps focus our attention on the range of issues presented by an ageing population.

An ageing population shouldn’t be seen as a crisis for our nation, however it raises issues that need to be addressed by strong and effective policy settings.

This report is yet another reminder of the need for action to ensure older people have the jobs, savings and support they need as they age and have a decent quality of life. This report also highlights just how big a mistake it was for the Prime Minister to cut the Advisory Panel on Positive Ageing, given the fact they were examining these very issues.

There are already major issues facing older Australians, particularly when it comes to employment. These issues should be seen as an indicator of things to come.

For example, we know that one in three people on Newstart are aged over 45. We know that the rate of Newstart is inadequate, which means people are living in poverty and may end up living like that until retirement age. Job services aren’t providing enough support and mechanisms to re-train and re-skill older workers are inadequate. Raising the pension age risks condemning those locked out of the workforce to a life of poverty, especially if we don’t resolve age discrimination.

The recent Fact or Fiction report from the Australian Human Rights Commission demonstrated that one in ten employers routinely reject older applicants. This attitude is making it increasingly hard for people in their late 40s and 50s, let alone their 60s and 70s to find work.

Without addressing these structural issues around employment, a significant number of people will remain in poverty for another five years before they retire. This same group will face old age without the savings, superannuation or equity they will need to pay for their housing and aged care. A serious consequence of such a change will be to further entrench inequality and poverty, which has serious impacts on mental and physical health and in turn creates significant costs for our health services.

Protecting the most vulnerable

This a particular risk for a growing cohort of women who do not have adequate savings, superannuation or equity to support themselves later in life, and who are also seeing themselves locked out of the workforce not just by age discrimination but also by the lack of flexible jobs that don’t recognise their equally important role as unpaid, principal carers as well as employees.

These factors also demonstrate that increasing the retirement age to 70 is not as simple or easy as it sounds, especially if we care about the wellbeing of low income Australians who depend the most on our social security safety net.

There’s also the issue of capacity. While many Australians continue to work in a full-time, part-time or voluntary capacity well after retirement age, not everyone can. People in labour-intensive jobs, manufacturing, trades and so on may simply be unable to keep working.

Clearly not everyone will have the capacity to remain at work and continue to support themselves later in life. This is an unfair burden to be placing on many hard-working Australians.

Aged care costs

However, the Productivity Commission report doesn’t just focus on retirement age – it reiterates that it is also time for a proper discussion about the ways in which assets and equity can be fairly used to pay for aged care.

The Productivity Commission has previously suggested mechanisms to achieve this which sought to ensure that this didn’t put a disproportionate cost burden onto older Australians who own their own homes. These mechanisms set out the conditions under which savings and equity could be accessed so as not to put a person or their partner at risk of hardship in order to pay for their aged care.

These were sensible recommendations that neither Labor nor the Coalition were ready to explore. The recent aged care reform process missed the opportunity to fully address this issue but we do need to explore how to make aged care more sustainable while ensuring that those most vulnerable in our community can still access quality aged care support.

In light of these issues, the Prime Minister’s decision to cut the low income superannuation contribution is especially cruel, and demonstrates the way in which this government is prepared to undermine the financial security of many older people. Such action does not prepare us well for the future.

Nor do these cuts save money. Cuts that hurt older Australians don’t just affect their capacity to be financially secure later in life; cuts like these actually increase the social welfare, health and aged care burden on the government in the future.

Targeting vulnerable people to address future revenue needs rings especially hollow given legislation to repeal the mining tax on massive resource companies is currently before Parliament. Instead, we need political leadership to address this issue and also the inadequacy of Newstart and employment services that are having an increasingly painful impact on older people.

Senator Rachel Siewert is the Australians Greens spokesperson on Ageing.

See also ‘Floated increase in pension age slammed’