Australia must hire and keep more older people and women in the workforce to lift economic and income growth and offset a decline in labour participation over the next 40 years, according to the government’s latest Intergenerational Report.

Treasurer Joe Hockey said on Thursday Australia’s “grey army” of workers would be critical to the nation’s future and enabling their participation would be the focus of a lot of “structural effort over the next few years.”

Workforce participation rates of people over 65 are projected to increase from 12.9 per cent in 2014-15 to 17.3 per cent in 2054-55.

“We need older Australians – we want older Australians, if they choose to do so, to remain in the workforce and come back into the workforce,” said Mr Hockey.

He said business attitudes needed to change as well as policy, and he pointed to New Zealand’s removal of discriminatory policies towards older workers as a contributing factor to its higher participation rates.

Mr Hockey said Australia’s female workforce participation rate also lagged behind other countries such as Canada.

According to the report, the number of Australians 70 years and over is expected to almost triple over the next 40 years, reaching around 7 million people by 2055. By this time, the number of centenarians is tipped to reach 40,000 – almost nine times the number in 2014-15.

Government spend on aged care

While Federal Government expenditure on aged care is forecast to double as a share of the economy by 2055, it will remain a small percentage of total GDP (1.7 per cent) and is less than government spending on health and defence.

The report said higher private incomes and tighter means testing in aged care would constrain future government spending in this area as part of a greater user pays system.

The long-term forecasts also recognise the current shift away from low care residential aged care to community care, which is cheaper to deliver, and the smaller cohort that will enter aged care following the baby boomers.

The biggest spending growth will be in the area of health, which will jump from 4.2 per cent of GDP in 2014-15 to 5.5 per cent in 2054-55.

However 80 per cent of this projected increase in real expenditure per person is the result of non-demographic factors such as higher incomes, health sector wages growth and technological change, said the report.

Stakeholder reaction

National Seniors chief executive Michael O’Neill said the report provided a foundation for policymakers to put to bed the doom and gloom outlook pushed in recent years.

However, more needed to be done to encourage mature age workforce participation: “The reality remains that, once unemployed, people in their 50s will spend two-and-a-half times longer out of work than a younger person – and many will never get a job again,” he said.

NARI’s director of health promotion, Associate Professor Briony Dow, said employers needed to recognise the value of employing older workers and cities and workplaces must become older person-friendly,

Council on the Ageing (COTA) Australia chief executive Ian Yates said the report highlighted the need to address the prevalence of age discrimination in the workplace and for a more comprehensive workforce participation policy. Offering more flexible working arrangements to older people would also be an important strategy, he said.

However he said a “glaring omission” in the report was the cost of superannuation tax concessions on public revenue, which was equivalent to the age pension and rapidly rising.

Budget cuts to the rate of growth of the Commonwealth Home Support Program from 2017 would be also be significant over time and would represent 0.4 per cent of GDP, Mr Yates said.

HammondCare chief executive Dr Stephen Judd said the report highlighted a triumph of public health and that population ageing was not just about aged care.

“Two out of three people aged over 70 will never need age care. But 100 per cent of people will go to a pharmacy for prescribed medication or for radiology or pathology tests – this is by far the main area we should be looking at to make savings,” said Dr Judd.

Benetas CEO Sandra Hills said that while significant reform had taken place, it was important to further develop strategies on quality of life, aged care funding arrangements and service provision in light of the report’s findings.

“This challenge can be met but will require a greater discussion of ageing beyond the confines of recent debate,” Ms Hills said, adding that it was imperative Australia had a  cabinet-level minister responsible for ageing who could work constructively across government to ensure the challenges were strategically addressed.

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  1. I am 77.
    Keeping older people working longer prevents younger people WHO WANT to work from getting employment

  2. The government needs to change their attitude towards the public.

    We need a government who has their priorities in order.

    Stop subsidising big business to destroy this planet and invest into new technologies.

    Stop manufacturing billions of dollars worth of military hardware over seas.
    If you have to spend that sort of money on military, then spend it supporting Australian companies who are very capable of doing the job along with having the benefit of getting 30% + of the money straight back in taxes. Sending money out of the country is very stupid.

    Invest into education and scientific research. Our world class research is being put at risk of stupid decision makers.

  3. Honest Joe is way behind the eight ball.

    He quotes NZ and Canada having more progressive policies toward us oldies and women.

    Where are his policies!! He has been in the job for 18 months and has only offered doomsday predictions without any positive optimist view of the future.

    This country needs real vision and leadership.

    Who is going to step up????

  4. Well if Mr Hockey wants older people to work; he needs to get off his ample posterior and facilitate it!
    He talks about people of the age of 50 and 60 who cannot work at their particular career anymore because of age, to go and get a more suitable job! It is just so easy to do! Where is all the infrastructure being built round all this taking place? Where is the policy direction and incentives to allow this to happen? Their policy has always been about neoconservative austerity introduced like it was in Europe, to drive down wages and lifestyles of ordinary citizens, this was their agenda in 2013 before the election!

  5. We should be looking at ways to make it possible for older people to work PART-TME.
    I am over 60, with a parent in the 90s – I can’t continue to work full time, and I cannot find part-time work in my field.

    We need to take a serious look at our Australian corporate world and make it a more FLEXIBLE work environment – both part-time and working from home for young families and for older workers, and carers generally who want these options.
    There are plenty of IC tools that allow managers to see whether a person is actually working or slacking off, when they work from home, so what is the problem? We need a big work culture shift to take place in this country if we are going to lift our productivity, share work around more equitably and generally improve the well-being of everyone!

    I am working in the aged-care industry and I have had to resign my job because of long travel hours and the full-time ‘in the office’ requirement.

  6. Ken claims “Keeping older people working longer prevents younger people WHO WANT to work from getting employment”. That is an appallingly bigoted comment.

    Older people don’t just WANT to work – and they have just as much right to a paid job as younger people. The best person should get the job – irrespective of age.

    In truth, older people working longer DOESN’T prevent younger people who want to work: there aren’t enough younger people to fill all the jobs. Look at the massive rise in volunteerism in the past couple of decades. Most of this work is vital, but older people are doing it for nothing. And, while they might be able to afford to give their time for free, they are stealing paid work from everybody – not just from younger people but from older people. Stop that, and watch the paid job vacancies rise – for young and old.

    Think: more paid jobs for more people in the workforce paying more taxes.

  7. This report has been so narrowly defined and framed that it is near useless. Barry Jones sadly demonstrated this in ABC RN his morning in his usual informed and lucid manner. It seems to have been myopically cut and shot to meet an LNP short term budget need, and not to enable and support serious discussion. It hard to know where to start on this crippled document,even the simplest issue such as investment in preventative health (a clear bete noir to the LNP) would change these figures very substantially..and thats just one item. The issue of climate change (magically dismissed by Abbott in the face of almost the entire world) has a huge impact and is totally omitted..

    Its so sad that a potentially valuable genuinely independent basis for non spin based discussion has been to swiftly consigned to the lame Hockey PR spin and selected truth basket… like almost any other previously credible and independent source of debate under the LNP

    Also any genuine and serious basis for such debate would be set up with a series of scenarios, with an open source and accessible (web based?) access to run your own variants… at the very east a probabalistic series of runs to get the bands and ranges of outcomes depending on various factors would have been explored..

    Also, had Hockey been serious (which he clearly still isnt ) in wanting a serious debate, then he would have set up a series of future scenarios and done backcasting and a range of key trigger points for sensitivity different policies to work things out more sensible RAND has done this for decades for governments. Why cant we have this simple and easily understood more flexible approach as the basis of a real, evidence based and credible discussion?

    We in our 70s can do this perfectly well- given the data and resources, so why doesnt Hockey pay us to do it as a first step in taking up enacting employment for elderly people as a start?

    Its just the same as the disabled say : “nothing for us without us”. Governance MUST change if we are to get a real engagement instead of this short term budget stacking of the numbers deck (for those who might enjoy [lack of] governance affecting the elderly shortfalls, try: )

    Its a pity that these basic instruments and points cant be got through to the opaque ‘policy’ areas of COTA and National Seniors (Im a member of both, but inability to get any meaningful tow way engagement to enable such things to be done to support the interests of the elderly (as well a s the genuinely aged, who have very different and demanding needs) from them ) is so sad. We really need these representative bodies to up the ante to address,engage and respond to these potentially valuabble numerate policy framings…
    Running a copy of STINMOD ( would be a great start! For those inetersted try the analysis of the 2014-15 budget ( is shows what can be done .

  8. Great response Marcus. You know something is wrong with a report when two of the best financial minds Dr John Hewson and Peter Costello who support Liberal ideology are criticising the modelling in a report by the Liberal National Party.

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