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Tag Archives: working age population

The Grey Army

Young people starting out in life are a great resource for our future. Investing in them, giving them a helping hand to get started, is the responsibility and obligation of this generation. We must nurture them while they learn not only skills for employment, but life skills. When they fall, we must help them get up, dust themselves off, and help direct them on a better path. We must give them hope and reinforce that opportunities are available – help them to prepare for and recognise them and take advantage when they come around. They must have choices. The social and productivity benefits of this are obvious.

Cutting funding for the Gonski reforms, closing trades training centres, removing the tool allowance, saddling students with huge debts, cutting off the dole for 6 months a year, compulsory work for the dole, defunding youth advocacy groups and employment assistance programs – none of these measures seem to meet our obligation to our young people. They have been given an ultimatum -“EARN OR LEARN” – but many crucial programs that would assist them in doing this have been abolished.

We are offering them the Green Army or the Gap Year Real Army or find someone to support you for 6 months and get good at taking rejection.

At the same time, we are raising the pension age to 70, indexed to prices rather than wages so progressively diminishing comparatively, driving more people into poverty in the future.

Because less than half of the population between 55 and 64 has any kind of paid job, and only 30 per cent has full-time work, we are also offering $10,000 to employers to take on an over-50 employee. At the moment 400,000 fit and willing Australians over the age of 55 can’t get work.

I understand their stated reasons for doing these things, I just don’t think they have really thought it through or examined repercussions or alternatives. They have also exaggerated/lied about projections (quel supris), at odds with the ABS, which may add another reason why funding to our national bureau of statistics has been slashed.

Hockey said that the number of Australians between 65 and 84 would “quadruple” by 2050 but on the ABS’s high-growth projection (they do high, middle and low) there will be 2½ times as many people in this age group by 2050 than there were in 2010.

Hockey said “the percentage of people of working age supporting those over 65 will almost halve”. Using ABS projections, the proportion of people “of working age” (defined by the statistician as 15 to 64) was about 67 per cent of the population in 2010 and will be 63 per cent in 2050. (This figure is based on the ABS’s middle projections.)

Hockey predicted that only 37 per cent of the population would be of working age in 2050, yet the best available estimates from the ABS show it is in fact is between 61 and 63 per cent. Even if age-employment ratios stay as they are now, if productivity keeps rising at its present rate, average wages will rise by 56 per cent over that time. So those in full-time employment will be better able to provide support and services to the rest of the community.

Increasing the pension age to 70 will see a large increase in the number of people on the disability pension. A higher proportion of people aged 65-69 will have a disability compared to those aged 60-64. It would also give us the oldest retirement age in the world. Several countries have moved to 67 as Kevin Rudd suggested, the UK is going to 68, but 70 is pushing it too far.

It is also inequitable. Indigenous Australians have a much lower life expectancy than non-indigenous Australians. Males 67.2 years and 78.7 years respectively, Females 72.9 years and 82.6 years respectively (ABS 2005-07). The majority of Indigenous people would not make it to pension age at all unless we can close the gap. People from lower socio-economic strata also tend to have a lower life expectancy, as do remote rural areas compared to urban living.

Australia currently has the fourth-lowest level of public pension spending of any OECD country and is projected by 2050 to have the third-lowest level of pension spending. Where Australia is unusual is that it has by far the highest level of tax concessions for private pensions in the OECD, at four times the OECD average.

An increase in the pension age reduces the pension wealth of lower-income groups proportionately more than it reduces the pension wealth of higher-income groups. It favours the wealthy who are able to invest in superannuation. Under current regulations, they can start drawing on this at age 60, get very large annual incomes paying far less taxation than workers on similar incomes, perhaps invest in a new family home, which will not be considered an asset should they find themselves eligible for a part pension when they hit 70 which, because they live longer, will be an expense on the public purse for longer.

As it will not come fully into effect until 2032 it also does nothing to help the current budget deficit. On its own, it will not do much to help with future deficits as tax concessions for superannuation are set to outstrip it in a few years’ time. Many complementary policies will need to be considered, including a requirement that superannuation be taken in the form of lifetime annuities to ease the pressure on age pensions. Affordable long-term care would also appear to be essential in preparing for population ageing, possibly through some form of long- term care insurance.

As with young people, this should be about choice and utilising a valuable resource, rather than viewing both our young and our old as a welfare burden due to some number on a piece of paper. Older people should have the option of working and flexibility in their employment to allow for carer’s responsibilities for elderly parents, disabled spouses, or grandchildren. They should not be in competition with young people, fighting over a dwindling pool of jobs. Their experience, expertise, knowledge and service should be recognised, celebrated, and used in more creative ways.

Currently much volunteer work is done by retired people. Upping the retirement age to 70 would see us lose some of that vital workforce. Rather than a Green Army, we could have a Grey Army of volunteers who could transition to retirement or supplement their pension or superannuation with volunteer work that attracted some remuneration or concessions. This work is often more attractive to older people who may be more suited to it and they could mentor younger people who may be interested in joining them.

Defunding Landcare and then tendering out the Green Army to private service providers (who collect a handsome fee for their free workforce with no workplace entitlements) is a decision that continues to baffle me. They were such an obvious meld, dedicated passionate people teaching the young to value their environment and using their labour in meaningful ways.

Young people could teach older people how to use modern technology like computers and mobile phones and even remote controls. This would vastly enhance the lives of elderly people and foster mutual respect rather than disdain or antagonism.

Obviously, the best solution would be to create more jobs and to close a few tax loopholes rather than forcing people into poverty, and to accept that there will always be some people who need our help, and always a small minority who will abuse our help. Dealing with that small minority should not dictate social policy.

Our children and our aged have every right to expect our help and support and we have an obligation to continue to protect a society that sees this as an investment rather than a handout.

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