Australia will need to lift productivity, keep people working longer or boost immigration to sustain our ageing population and economy, a prominent Australian demographer says.
Australia's ageing population could affect our standard of living in years to come, as the proportion of Australians in older age cohorts continues to grow.
What will help Australia keep some of its youth?
Immigration helps to slow Australia's rate of ageing, Professor of Demography from ANU, Peter McDonald told SBS News.
That is because immigrants are more likely to be working age than the average Australian.
The number of Australians who work is one of three factors that determines Real Gross Domestic Product (GDP) per capita, which is a key statistic for measuring economic growth.
As Australia’s population gets older and more people leave the workforce, Australia’s Real GDP per capita could fall if there is no improvement in labour productivity.
“You have to run harder with the productivity component," Prof McDonald said.
"Or make us a little bit younger. You do that through migration.
“Or, you can keep people working of course too.”
While immigration is important for the economy, there is a limit to its benefits, which are greater when there is stronger demand for workers.
“What we need is a flexible migration policy that responds to labour demand, and that’s really what we’ve got,” Prof McDonald said.
What is behind the ageing of Australia?
The shift in Australia’s population distribution is primarily due to rates.
“The Australian birth rate was high during the Baby Boomer years,” Prof McDonald said.
“From the 1970s onwards, the birth rate went to a lower level.”
Prof McDonald said the Baby Boomers – who made a large under-20s bulge during the 1970s – had now started to enter retirement. The Baby Boomers will continue retiring over the next decade.
On top of that, we are living longer, Prof McDonald said.
“We’re much more likely to be living into the 80s and 90s than we have in the past.”
He said the older generation today was healthier than older generations of times past, in part thanks to less heavy drinking and smoking throughout people's lifetimes.
Increased access to medical care and drugs, which has allowed society to control disease more effectively, has been an important development.