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Ageing

Australia's population is ageing - that is, the average age of Australians is rising. The ageing of Australia's population has several causes:

• Overall life expectancies have been rising and will keep rising.
• Australia is experiencing the later stages of a demographic bubble, the unusually large number of so-called "baby boomers" born between 1946 and 1964. This effect will continue for the next 40 years.
• The rate at which Australians are having babies has dropped in recent years.

The result of these forces is that by 2047 around 25 per cent of the population is expected to be aged 65 or over, almost double the proportion today.

This rise in relative numbers of older Australians will eventually:

• Slow economic growth, because labour force participation rates fall as less people stay in the workforce.
• Put pressure on government finances, because government pension and health costs will rise while slower growth reduces the tax take.

It is not likely to bring about an economic crisis, but it will put economic stress on our community. How much stress will depend on how we react.

CEDA ageing research and analysis

• Growth 51: Australia's Ageing Population
  The balance between public and private provision of services will assume greater prominence as Australia's population ages.
• Growth 56: Lifelong Learning
  Australia's ageing population heightens the need for new ways to keep growing the workforce skills of older workers.
• The case for raising the pension age
  CEDA's Information Paper 89, Pensions for Longer Life, makes the case for raising the pension age gradually to 67 and then linking it to life expectancy.
• Pension age: 97 years on, time for a rethink
  CEDA chief executive David Byers explains the thinking behind Dr Knox's pension age proposal.
• The economic impact of Australia's ageing population
  Treasury's chief macroeconomist, Dr David Parker, argues that population ageing should drive continued efforts to promote economic openness, spending discipline, productivity and labour force participation.

See more about CEDA's work on lifelong learning.