Government policy to blame for rising cost of pension, not ageing population
Clive Palmer said his party will not support Joe Hockey's push to increase the pension age to 70. Photo: Eddie Jim
The notion that pensioners are about to become a burden on Australian workers is ridiculed in a research paper.
The report, by Monash centre for population and urban
research, says that while the cost of the age pension has grown faster
than gross domestic product over the past decade, demographic ageing is
not the cause.
"The rising costs have been due to discretionary policy changes," the report says.
On Sunday, Clive Palmer – whose Palmer United Party will hold
the balance of power in the new Senate in July – said his party would
not support a rise in the aged pension to 70.
Mr Palmer’s position will cause a headache for the
government. Treasurer Joe Hockey has spent the past few weeks explaining
why a rise in the age pension is inevitable.
On Monday, Katharine Betts of Swinburne University will publish The ageing of the Australian population: triumph or disaster.
Her report says fears a dwindling proportion of tax-paying
workers will be unable to support a growing proportion of age pensioners
"Even with no further growth in labour force participation
rates, the proportion of workers will not fall as low as it was in the
1960s," the report says.
Ian Hammet, 69, juggles his time running an online games store on eBay and managing the Australian Cricket Society’s website.
Mr Hammet, who used to own a chain of shops selling board
games and puzzles, started working from home eight years ago after he
sold his flagship city store.
"I kept doing what I did best, which was selling games. I’m pretty busy with both jobs," he said.
Mr Hammet said raising the pension age was "inevitable" and older Australians still had a lot to offer the workforce.
"When you get to your 60s, you start slowing down but I think
it's good for people to keep working," he said. "It keeps the mind
active. We can still contribute and we're active and capable of
Dr Betts blames government decisions for the apparent
increased costs of ageing, such as the decision to widen access to the
pension and to abolish tax on superannuation payouts.
She also notes that the labour force participation of older Australians is close to a record high.
"Some opinion makers are happy to deride baby boomers, [but]
this does not help older people cope with discrimination," she writes.
"In a more positive social environment, labour force participation rates for older people would be even higher.
"A comparison of data from 31 OECD [Organisation for Economic
Co-operation and Development] countries shows no association between
their age structure and rates of labour-force participation."
The Netherlands, Switzerland, Norway and Canada all have
older populations than Australia but have higher labour force
Dr Betts says only about 40 per cent of taxes are based on
paid labour, meaning the remaining 60 per cent are likely to be
unaffected as the population ages.
Other OECD data shows no association between the proportion
of a country’s population aged over 65 and the proportion of its GDP
spent on health.
The US has one of the youngest populations in the OECD but
spends 18 per cent of its GDP on health. Japan has the oldest but spends
only 9 per cent.
The health of older people is improving.
"British research finds that dementia rates among people aged
65-plus fell by 24 per cent between 1991 and 2011," the paper says.
On Sunday, Mr Palmer said his party would not support increasing the age pension to 70.
"I just couldn’t employ Joe Hockey or Tony Abbott at 69 no
matter how competent they are," Mr Palmer told the ABC. "They wouldn’t
have a good future and I wouldn’t invest the time in training them
because they’d be retiring the next year.
"I know Mr Abbott and Mr Hockey are not too concerned about
the pensioners of Australia because they’ll have a big fat parliamentary
pension that you’ve paid for. I think that’s the whole nub of it,