19 June 2015

Treasurer, the Hon. Joe Hockey

Image: Treasurer, the Hon. Joe Hockey, speaking at the CEPAR Intergenerational Report forum. 
Photo courtesy: CEPAR and Mark Graham.

 

The Intergenerational Report (IGR) is the Australian Government’s periodic assessment of where our changing demography is taking us in the long term. The most recent IGR was released in March 2015. 

In April, the ARC Centre of Excellence in Population Ageing Research (CEPAR) organised a public forum to promote community awareness and understanding of the 2015 Report, and the issues it raises.

Opened by Treasurer, the Hon. Joe Hockey MP, and with senior government officials and community leaders serving on panel sessions, the forum brought together multiple and informed perspectives on population ageing.

IGRs for Australia have been produced since 2002. The current release has attracted greater media and political attention than previously, perhaps reflecting a growing public and political awareness of the challenges and opportunities that population ageing presents.

CEPAR Director, Professor John Piggott, said the forum highlighted the importance of the Centre’s role.

“The IGR public forum is an excellent example of how CEPAR works closely with the government, corporate and community sectors to inform and stimulate discussion about the potential impacts of demographic change in Australia,” he said.

While a public document, the IGR can be tricky to interpret. Drawing on its multidisciplinary research team and strong partnerships with industry, government and community groups, CEPAR assembled a range of leading experts to interpret this fourth IGR, which projects how demographic change combined with current policies will impact Commonwealth finances to 2055.

The keynote address by the Treasurer focussed on labour force participation and productivity, and the need for greater flexibility to increase workforce participation and employment of older people.

Following Mr Hockey’s address, CEPAR Investigators Professor Peter McDonald, Professor Hal Kendig, Professor Hazel Bateman and Mr Peter Whiteford joined Treasury Secretary Mr John Fraser, senior government representatives Mr Matt Crooke (Treasury) and Mr Sean Innis (Department of Social Services), former AMP Chief Executive Office Mr Craig Dunn, Councils on the Ageing Chief Executive Mr Ian Yates, and Melbourne University health economist Professor Philip Clarke, to interpret and analyse the key issues. Topics included the impact of population ageing on economic growth, workforce and public finances in Australia, as well as government supported programs such as retirement provision, health and aged care.

Over 200 representatives from government departments, peak bodies, community organisations and interest groups attended the forum, reflecting growing recognition of the impact of population ageing.

CEPAR produces world-class research to transform thinking about population ageing, inform product and service development and provision and public policy, and develops unique collaborations that bring together academia, government and industry with a multidisciplinary focus. The CEPAR team includes economists, gerontologists, epidemiologists, demographers, actuaries, sociologists, psychologists and finance specialists.

“Effective engagement with external stakeholders is an integral part of CEPAR’s research activity and the 2015 IGR provided a perfect opportunity to lead debate about one of the most important challenges of the 21st century,” Professor Piggott said.

“Australia leads the way in promoting awareness of the social and economic consequences of changes in demographic structure and establishing policies that will have a strong influence on the quality of life of older people.”

Australia was one of the first nations to produce an official government Intergenerational Report; now, about two-thirds of OECD countries produce long-term fiscal projections covering a time span of more than 30 years.

The 2015 IGR places population ageing and older people centre-stage in the public and political debate, with a fundamental message that actions taken today could have a major impact on Australia’s long-term future.

Understanding future challenges requires an appreciation of our confidence in the numbers. As CEPAR Chief Investigator Professor Hal Kendig pointed out, the IGR is about projections, not predictions; and these projections are based, as CEPAR’s Deputy Director Professor Peter McDonald illustrated, on demographic assumptions which are already ‘outstandingly different from 2002’.

Since that first IGR, for example, the projection of (period) life expectancy in Australia in 2050 has risen—by 4.3 years for men, to 87.5, and by 1.9 years for women, to 90.1. Measured on a cohort basis, the IGR projects that a girl born in 2055 could expect to live 96.6 years compared to 93.6 years for a girl born in 2015. For boys, the corresponding increase in life expectancy at birth by 2055 is from 91.5 to 95.1 years.

With the proportion of Australians aged over 65 expected to more than double  by 2050, the two panels of experts considered how Australia should address the challenges, and opportunities, of what the Treasurer referred to as an ‘ageing boom’, considering the notion of different stages of retirement and how older people may transition between states of health and wealth.

Mr Sean Innis, Department of Social Services Policy Office Group Manager, discussed a model of four distinct phases of ageing: pre-retirement (recognising that some older people stay at work longer), healthy retirement, ageing, and end of life. Such an approach aids understanding of how behaviour, needs, and public expenditure change over the life course.

CEPAR research into ‘ageing well’ informed discussion about how people stay healthy and independent in the phases following retirement, before the onset of older age and reduced mobility and cognition. 

Research conducted at CEPAR shows variability between men and women, with factors for ageing well including: good health and nutrition, social support, and opportunities beyond paid work. Further discussion ranged across accumulation and decumulation phases of superannuation, retirement timing, longevity risk, individual financial decision making, and aged care design and delivery.

The idea of a ‘social compact’ between generations was also explored, drawing on research by CEPAR personnel which indicated that intergenerational bonds are strong, with many believing that older Australians deserve more in later life.

Treasury Secretary Mr John Fraser noted that the real potential of the IGR is in its contribution to the case for policy change, and highlighted the impact of demographic change on Australia’s tax system.

This article was prepared for ARChway by CEPAR.

About CEPAR: Based at the University of New South Wales (UNSW) with nodes at the Australian National University (ANU) and The University of Sydney, CEPAR is a unique collaboration bringing together academia, government and industry to address one of the major social challenges of the twenty first century. 

Email: cepar[@]unsw.edu.au
Call: +61 (2) 9931 9202 
Twitter:    @cepar_research

Videos of all the presentations and panels sessions from the public forum are available on the CEPAR website