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Dr Tracey McDonald AM PhD FACN, Professor of Ageing, 2010

Our world is rapidly moving towards a more mature population structure where it is no longer necessary to have many children to compensate for high infant mortality rates and early adult deaths from infection and trauma.

Early last century when life perched precariously on the likelihood of dying young, or during childbirth, the idiom ‘carpe diem’ seemed apt to a population that recognised the need to get as much done as possible in a short life which, even if one were to achieve seniority, only marginally exceeded the biblical estimation of ‘three score and ten years’. Australian now boasts one of the highest longevity levels in the world and the expectation of a much longer life is realistic. Advice for travelling that long life is more ‘carpe viam’ as we hold on tight and enjoy the ride.

Population projections based on a total fertility rate of 1.8 babies per woman, and a new overseas migration of 180,000 per year is that males born in 2010 will have a life expectancy of 85 years and females born this year will have 88 years. In just 10 years from now, babies born in 2021 will have a male expectation of 93.9 years and females, 96.1 years. (ref: Population Projections, Australia. 2006 to 2101 (ABS Cat. No. 3222.0)

Assumptions used in population projections have remained the same for most of last century and possibly to allow some comparative basis with other countries. Essentially older people refer to those aged 65+ years and working-age refers to those aged 15 to 64 years. When we think about how many 15-year-olds working rather than being in school, the anachronistic nature of these assumptions hit home.

The hegemonic impact of these assumptions lies in shaping social attitudes around rights, entitlements, needs, burdens and expectations of people aged 60 and above. For instance, a person employed full-time who has been paying into superannuation for decades automatically is denied death cover insurance at aged 60 despite being able-bodied and healthy.

Another term is the ‘old age dependency ratio’ which compares the size of the older population (65+ years) with the working age population (15 to 64 years) divided by the number of people aged 15 to 64 years. This simplification does not take into account the absence of younger people from paid employment through post-school studies or disability or even those on welfare. It also does not acknowledge the trend in Australia of children remaining at home being supported by their parents or parent well into their 40s or those who marry and return with spouse and children to be supported by elderly parents.

With the projected changes to the population over the next 45 years, the shrinking of the working-age population and the expansion of the 65+ population has led to using the ‘old age dependency ratio’ to estimate a doubling of the ratio from 20% in 2007 to around 40% in 2056. Extrapolations of how many tax-payers will be available to support one person over 65 years are based on such shifting sands – yet they are used by governments and others such as insurance companies to justify policies that reduce the support people in their 60s today expected to receive after many decades of paying taxes.

People aged 60+ will have chosen their strategy for providing for themselves in late age and the most common option in the first half of last century was to invest in real estate – particularly to own one’s home where you could live out your life. Share market investments were rarely taken up by this group and those who have, in recent decades, done so through superannuation or government bonds. Still the mainstay of their planning has been to own the family home combined with the age pension and universal health insurance to which they have contributed through taxes during employment years. Modest savings and part-time employment or income-generating projects contribute to the quality of their lives in retirement. Few in this group expect to rely on their children for financial support yet there is evidence of intergenerational competitiveness emanating from younger groups.

Competition for employment, status, positions, welfare, health care, education and other resources needed to support an acceptable quality of living, is increasing.

Older generations are being pressured by their families and employers to give up paid employment or to give up the family home and move to more modest accommodation such as granny flats, hostels or boarding houses, allowing younger family members to have the house. The cost of their new accommodation often determines the quality of living available and too often families are reluctant to contribute to these costs even though they now have the family home which many regard as their inheritance (albeit before their parent has died).

Last updated 18/11/2019
Copyright © 2019 - 2023 Dr Tracey McDonald