Face of Ageing - Impacts

Participation and Ageing
4 The faces of independence
4 The faces of eldercare
4 The faces of homelessness
4 The faces of health
4 The faces of spirituality

Recommendations

Contacts

References

Our Vision
Wesley Mission Sydney is a strategic city church committed to the proclamation of the Gospel of Jesus Christ and a ministry of word and deed throughout Australia, ministering to human need, utilising the media and providing personal and family care.

Our Values
Christ is central to all our values.
We are committed to a balanced ministry of the Word, Action and Spirit.
We therefore value and seek:

The worth of every individual
Personal salvation for all
The enhancement of skills, opportunities, knowledge and safety of our people
Integrity and accountability in all we do
Wise management of resources
Leadership founded on servanthood, vision and innovation

This report was prepared by
Wesley Mission's Strategic Planning & Development unit, (Manager Sharon Hoogland; Research Assistant, Megan Chambers) who wish to acknowledge the unique contributions of Wesley Mission Managers in areas covered by this report.

Special thanks to Dr Keith Suter (Consultant, Social Policy), Tracy Carr (Aged Care R&D), David McGovern (Public Relations Manager), Lyndal Parker (Graphic Designer) and Steven Chapman (Production Co-ordinator), Rev Dr Les Underwood and Rev Helen Edgerton.

The Impact of an Ageing Population

Old age is a relatively new factor in the history of the human race. At the turn of the century, life expectancy in Australia was 45 for men and 46 for women. Now it is 75 for men and 81 for women.

We know that Australia's population is ageing! By 2041, the Australian Bureau of Statistics predicts that one in five people will be over 65 and 7% of the population will be aged over 80 (the fastest growing group in Australia).

There are several reasons for this trend.

The "baby boom" generation, resulting from a huge surge in the birthrate following World War II and before 1961. This generation is now middle-aged. Their sheer numbers have ensured that at every significant point in their lifecycle, markets have expanded to meet their demands. For most of their adult years, cocooned in a culture of contentment and consumerism, concerned only for themselves, they are beginning to show concern about superannuation schemes and how we're going to afford the elderly.6
Improved medical technology and health awareness are allowing us to live longer lives. In 1995, men lived on average three years and women two years longer than ten years previously.7 Life expectancy after age 65 is now 15.8 and 19.6 years respectively, the sixth highest in the world behind Japan, Hong Kong, France, Switzerland and Canada.8
Opportunities for women have increased, such as employment and travel. Many are therefore starting families at later ages than ever before, with some choosing to forego motherhood all together. Another reason for starting families later is because of the increasing length of time required to obtain a basic education.

The cost of ageing

Of 10 OECD countries surveyed:

Australia spends the lowest percentage of its GDP on providing government pensions (2.6%).
Couples on government pensions in Australia are by far the worst off when their average incomes are measured against the incomes of non-pensioners. (Pension couples receive 13% of non-pensioner incomes).
There are fewer than 17 people of pension age for every 100 people of working age (18 - 64 years). But the ratio is rapidly changing, with indications that by 2030 there will be more than 33 people of pension age for every 100 of working age.9

Whilst many regard the ageing of the population as a triumph of a civilised and caring society, others see it as a major problem facing the community.

The 'bulge' of baby boomers, born after World War II, is set to start retiring from about 2005 onwards. Whilst there has been a marked decline in Australia's birth rate over the last 30 years, we are enjoying an ever-increasing longevity amongst the population. The income to support the growing number of retired people will come from three main sources: the age pension, the employees' compulsory superannuation scheme begun in 1992, and their voluntary savings.

Who will pay the medical bills when the baby boomers reach old age? The current crisis in health care and hospital waiting lists may well be early warning signs of a far more significant crisis to come.

A recent survey showed:

almost a third of baby boomers have saved less than $2000 for their retirement, and a staggering two-thirds have parked their savings in bank accounts which are lucky to earn 3% interest.
28% had less than $2000.
19% had between $2000 and $9000.
20% had $10,000 - $49,000 and
26% had $50,000.

This is very bad news because experts are estimating boomers will need at least $1 million of assets to retire.10

The support of the elderly will require an enormous workforce.

Currently, around 10% of persons over 70 years are in institutional care, costing about $40,000 per year. Given the implications of our demographic time bomb, this issue demands attention. While we are concerned about finding employment for older persons who have been displaced as a result of technological change, it is also evident that we need to focus on the potential of the workforce required to cope with the care of our aged and disabled. This is the industry with the most rapidly increasing demand for workers. (Sweden has one of the highest female workforce participation rates in the world. The biggest employment sector for women there is caring for the aged and disabled). While such caring has long been seen as "women's work", ABS data reveals that in Australia, about half of our carers are male.11

Ageing and Workforce Participation

Even though we are living longer, we are not working longer. In fact, men in particular, are retiring earlier than ever before.

From 1973 - 1993, the proportion of men aged 55 to 59 who were not in the full-time labour force rose from 14% to 36%. For men aged 60 - 64 the rise is from 28% to 61%. So, for a variety of reasons, the majority of men retire well before age 65.12

Compulsory retirement for men at 65 years, or women at 60 years, even though illegal, is now rarely an issue. At 55 years, people become eligible to take their superannuation payout. However, while early retirement is a voluntary option for some men, for others it is because they cannot find employment.

As well as encouraging all Australians to invest for their retirement, another way to help ease the above problem of funding our ageing population is to educate business people, especially human resource managers, against ageism. Despite the implementation of legislation against age discrimination in the workplace, ageism can be disguised in many subtle forms. Not only those in their 60's but also in their 40's and 50's are experiencing great difficulties in finding employment due to persisting stereotypes. An Australian study reported that 64% of persons aged 55 years and over stated that their age was the main difficulty in finding work, compared to 16% of people aged between 35 and 44 years.13

Research has found that many employers believe that older persons (even as young as 45) have a shorter working life and will therefore provide lower returns to the company. This assumption not only makes employers reluctant to employ older workers but also to re-train them. Lack of training translates into fewer skills and perpetuates the belief that older workers are unable and/or unwilling to learn and lack skills. The removal of age discrimination against older workers is expected to have social benefits such as increasing the GDP, raising revenue from taxation and reducing spending on welfare.14

Estimates show that more than 80% of labour force growth to 2016 will be by people aged over 45.
The percentage of workers over 55 is expected to increase from 10% in 1998 to 15% by 2016. However, the teenage work force is projected to decline.15

Research in Europe, which appears to be several years ahead of Australia in tackling issues about ageing populations, indicates the benefits of retaining workers beyond the age of 45. Evidence shows older workers' job performance is better than younger workers. Older people learn how to do things better through years of experience of working. The British government has drawn up a code of practice to raise employer awareness about the benefits of employing older workers, and Germany has introduced a gradual retirement scheme, allowing Germans to work part-time leading up to retirement. A London researcher, Dr Phillip Taylor, warned employers about the long term social costs of discriminating against older workers, maintaining that if they are fit and able, there is no reason why people cannot keep working at 75 or even 80.16

The ratio of people of working age to people over 65 is currently 5:6, however, it is expected to fall to 2:5 by the year 2051.17
In 1988, 64% of men in full-time employment were entitled to superannuation benefits, however by 1995 this figure had risen to 86%.
1988, but by 1995, 89% had access.
In 1994, 74% of men and 87% of women had already retired from full-time work during the five-year period preceding their eligibility for age pension."18
However, ten years ago, people who retired with lump sums benefited from bank interest rates around 16%, while today, lump sums can earn as little as 4%.

Past, and even current, superannuation has had significant shortcomings. One of these is the result of women's employment patterns. Women have generally always been the carers of society, raising families, homemaking and caring for elderly and disabled relatives and friends, and these duties do not generate an income or, therefore, superannuation. Up to the 1960's and 70's, even if they were working full-time, women were not generally offered superannuation. Now retired or retiring, they must rely on the pension or their husband's generosity.

Even today, the most usual work pattern for women is broken employment periods with some part-time work, while the most common pattern for men is continued full-time employment. For these reasons, a large enough amount of superannuation to live on is much more likely to be accumulated by men than women. Single women are the group most likely to live in poverty in old age. They have not accumulated superannuation, they do not have a husband for support, and the low pension rates keep them close to or below the poverty line.19

The size of the baby boom population has been sufficient to easily provide the necessary number of taxpayers to finance the welfare provisions Australia currently supplies (about 4.3 million baby boomers compared to about 2.2 million in the over 65 year age group.) However, a radical change will occur in the relationship between the number of people in retirement and the number of up-and-coming taxpayers available to fund pension and health-care benefits when the population 'bulge' moves into old age.

To understand the long term perspective, there are 200,000 fewer Australian children in the 0-5 years age group today than there were 35 years ago, and the birthrate is at its lowest level ever.20

Wesley Employment Services: assists persons to improve their job seeking skills and thus reduce the negative effects of unemployment. It offers individually-tailored help to long-term unemployed and other disadvantaged job seekers to address the employment barriers and place them in jobs. Assistance and training is also provided for jobseekers with viable business ideas to help them to establish their own business. Wesley Employment Services offers courses and programs that train participants in areas as diverse as computers, retail, commercial cleaning and more. During the 1998/99 financial year 4920 jobseekers were assisted. (See page 48 of this report for contact details.)
When Sam arrived in Australia in 1996, he came with nothing more than some letters after his name and a family in tow.
A political refugee who fled his homeland out of fear for his life, the 55 year old father of three was despondent that his degrees in Mathematics and Electrical Communication were not recognised in Australia.
Fortunately, Sam discovered the staff at Wesley Employment.
They undertook the necessary negotiations to ensure Sam's existing skills were officially recognised through the Department of Workplace Relations and Small Business. They supported Sam through his efforts to learn English, complete a TAFE certificate in electrical welding and hold down casual work.
The additional training and ongoing support and encouragement gave Same the confidence to keep hunting for work. Earlier this year, he was delighted when he secured a part-time casual position as a mail sorter, at Australia Post.
While it is still a far cry from the position he held back in his homeland, as a senior electrician with a large construction company, Sam is committed to improving the lot of both himself and his family.