On page vii of the Executive summary of the Intergenerational Report it states that the life expectancies for men and women are “91.5 and 93.6 years today.”
However, the ABS figures released on 06/11/2014 say:
“Based on current mortality rates, a boy born in 2011-2013 can expect to live 80.1 years, while a girl can expect to live 84.3 years”
A spokesman for Mr Hockey, when asked about the discrepancy, said that it was due to using different methodology. It was explained to me that they had used a cohort methodology which anticipated future changes like improvements in health and technology in the coming years, hence the higher figure.
That sounded fair enough though it did seem a rather large difference just by using different methodologies so I rang the ABS and was directed to the following:
“The Australian Bureau of Statistics (ABS) uses the cohort-component method for producing population projections.”
Hmmmm…it seems the ABS and Mr Hockey were both using the cohort methodology. So I read further.
Under their best case scenario, male life expectancy would reach 92.1 years in 2060-61 and female life expectancy would reach 93.6 years, almost identical to what Hockey is using as today’s life expectancy.
If, as is perhaps more likely, life expectancy continues to increase but at a slower rate, male life expectancy at birth is expected to reach 85.2 years in 2060-61 and female life expectancy to reach 88.3 years.
The Intergenerational Report says that “in 2054-55, life expectancy at birth is projected to be 95.1 years for men and 96.6 years for women” an extra three years for both on the ABS higher prediction and six years earlier.
When estimating the resources we will need to cope with an aging population, the cumulative effect of adding ten years to current life expectancy and three years to projected life expectancy in 40 years is huge.
In April 2013, Tony Windsor said:
“If the package of technologies enabled by high-speed broadband can keep 5% of elderly people in their homes for just one extra year, Australia could save $60 billion over ten years on aged care facilities ($4 billion a year in bed operating costs and $20 billion in capital costs). These savings alone would more than pay for the NBN.”
Not only does this show how small changes can make a huge difference, it also shows what we should be investing in to help address the costs of our aging society.
We will certainly need more aged care facilities but investing in things that can keep people out of care, even for a year, will help not only the bottom line, but also contribute to the well-being and quality of life for our seniors.
The NBN is one thing that has the potential to do that.
We also need more community nurses and services like cleaning, gardening, home maintenance, grocery deliveries, transport and such, to support the elderly to stay in their own homes. Doctors on call to do home visits could reduce the burden on hospitals.
Increased respite care facilities to support carers would also be beneficial. Their contribution to society should be recognised both for its selflessness and for how much it saves the government.
In the 2013-14 budget a trial was announced to provide an income and assets test exemption for pensioners over age pension age who ‘downsize’ their home.
The exemption was designed to help pensioners who want to move to a home that better suits their needs, but are concerned about the possible impact extra money in their bank account (after downsizing their home) may have on their pensions. Seniors over age pension age who have lived in and owned their home for more than 25 years, who then downsize to a home of lesser value, would be able to place at least 80 per cent of the excess sale proceeds (to a cap of $200,000) from the sale of their former home into a special account. This special account would be exempt from the pension income and assets tests for up to 10 years, or until a withdrawal was made from the account, whichever occurred first.
This was scrapped in the 2014-15 budget.
The government’s reaction to the costs of our aging population is to make us work longer, cut increases to the superannuation guarantee and aged pension, and make us pay more for health. All of these measures reduce our standard of living and long term prosperity.
An alternative, to improve the quality of life for seniors by proactively assisting them to remain in their homes for a year or two longer before going into care, has the potential to save more money than any of their backward savings measures.
And Mr Hockey, an honest mature national discussion is not helped by deliberately exaggerating the figures.
I would prefer some imagination in the solutions rather than the statistics.
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