Ageing population an ‘economic time bomb’, Treasurer says

By Cameron Micallef

November 20 2019
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Treasurer Josh Frydenberg wants to solve the “economic time bomb” of an ageing population through upskilling older Australians to stay in the workforce past 65.

Treasurer Josh Frydenberg’s comments came at a Committee for Economic Develop of Australia (CEDA) dinner, when the Treasurer explained he wants older Australians to stay in the workforce longer to keep the nation afloat.

“It is not about forcing people to stay in the workforce, but rather giving them the opportunity and the choice to pursue life-long learning and skills training if they so choose,” Mr Frydenberg explained.

To help the economic headwinds Australia is facing, Mr Frydenberg said the nation needs to focus on policy, with governments at all ages having a role to play with re-tooling older Australians.

“Our policies need to leverage the three P’s: population, participation and productivity.

“Governments at all levels have a role to play.

“Federally, we announced a program in last year’s budget that was designed to provide career advice and funding support for those aged between 45 and 70 who were re-tooling for the workforce,” Mr Frydenberg continued.

“When it comes to workforce participation, we are at record highs, and the participation rate for those aged 65 and over has increased from 12.3 per cent to 14.6 per cent over the last five years.”

In a report published by the Parliamentary Budget Office earlier this year, it was estimated 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.

In dollar terms, this equates to an annual cost to the budget of around $36 billion.

Advocacy groups say Mr Frydenberg’s speech has unintended ageism by implying that older generations are a problem.

National Seniors Chief Advocate Ian Henschke noted that some older Australians want 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,” Mr Henschke said.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron Micallef

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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Retirement