Is this one of the documents that Macrobusiness has used to blame the government for 'the so called demographic time bomb'?
NTRODUCTION
The population projections presented in this publication cover the period 30 June 2008 to 2101 for Australia and 30 June 2008 to 2056 for the states, territories, and capital cities/balances of state.
The projections are not predictions or forecasts, but are simply illustrations of the growth and change in population which would occur if certain assumptions about future levels of fertility, mortality, internal migration and overseas migration were to prevail over the projection period. The assumptions incorporate recent trends which indicate increasing levels of fertility and net overseas migration for Australia.
This chapter discusses the projection results, in terms of population size and growth, and the changing age structure and distribution of the population. Three main series of projections, Series A, B and C, have been selected from a possible 72 individual combinations of the various assumptions. Series B largely reflects current trends in fertility, life expectancy at birth, net overseas migration and net interstate migration, whereas Series A and Series C are based on high and low assumptions for each of these variables respectively.
In the 10 years to 30 June 2007, Australia's population increased by 1.3% per year on average, with just over half of this growth resulting from natural increase (the excess of births over deaths) and just under half from net overseas migration (NOM). In the last 2 years, Australia's population has grown by 1.5% per year, with NOM contributing more to population growth than natural increase in the year ended 30 June 2007. In 2006-07, there were 274,300 births and 134,800 deaths in Australia, resulting in natural increase of 139,500 people, while NOM contributed 177,600 people to Australia's population.
In Series C, a state of natural decrease, in which deaths outnumber births, is reached in 2048. However, net overseas migration more than compensates for losses due to natural decrease and Australia's population continues to increase, albeit slowly, throughout the projection period. A state of natural decrease is also reached in Series B, but only in the last year of the projection (2101).
In contrast to the 2004-based set of ABS population projections released in November 2005, no series shows population decline for Australia before the end of the century.
POPULATION AGEING
The ageing of Australia's population, already evident in the current age structure, is expected to continue. This is the result of sustained low levels of fertility combined with increasing life expectancy at birth. The median age of Australia's population (36.8 years at 30 June 2007) is projected to increase to between 38.7 years and 40.7 years in 2026 (Series A and C respectively) and to between 41.9 years and 45.2 years in 2056 (Series A and C).
The age composition of Australia's population is projected to change considerably as a result of population ageing. By 2056 there will be a greater proportion of people aged 65 years and over than at 30 June 2007, and a lower proportion of people aged under 15 years. In 2007 people aged 65 years and over made up 13% of Australia's population. This proportion is projected to increase to between 23% and 25% in 2056 (Series B and C respectively) and to between 25% and 28% in 2101 (Series B and C). The proportion of people aged under 15 years is projected to decrease from 19% in 2007 to between 15% and 18% in 2056 (Series C and A respectively) and to between 14% and 17% in 2101 (Series C and A).
There were 344,100 people aged 85 years and over in Australia at 30 June 2007, making up 1.6% of the population. This group is projected to grow rapidly throughout the projection period, to between 4.9% and 7.3% by 2056 (Series B and A respectively), and to between 5.8% and 9.3% by 2101 (Series B and A).
Far from ignoring the ageing population, Treasury has made its own studies, the Australian government has commissioned reports, the OECD and UN has done their own research. So NO, nobody ignoring 'the demographic time bomb' (what a derogatory term for old people!). The latest rearch paper by Jessica Brown and Oliver Hartwich - entitled 'Modelling Australia's Demographic Future' (2010) actually supports the Treasury's findings, quote:
So far, Australia has largely managed to avoid these difficulties [of Europe & Japan] thanks to a combination of high fertility rates and high levels of migration. But population ageing will nevertheless become an increasing challenge.
There are currently about 820,000 Australians aged 80 or over. By 2050, this will double – regardless of changes in fertility and migration.
If migration is halved, there will still be 1.9 million Australians over the age of 80 in 2050. If life expectancy increases (as most scientists expect it to), there will be more than 2.1 million octogenarians.
While Australia’s total population won’t double, the combination of growth plus ageing means the number of very elderly Australians will.
This will have great benefits for Australian society. We will be able to draw on the wisdom and social contributions of older Australians. But it will also present policy challenges.
We will need more hospitals, aged care facilities and support services for the elderly. An older population will require different types of housing and transport infrastructure.
In the latest Intergenerational Report published in 2010, Treasury projected that health care spending will need to increase from 4 per cent of GDP in 2009-10 to 7.1 per cent in 2049-50 due to population ageing.
Spending on aged care is projected to grow from 0.8 per cent of GDP to 1.8 per cent in the same period.
These numbers may not seem significant, but by 2050 the cost of providing pensions, aged care services and health care will be an extra $60 billion a year in today’s dollars – more than three times what we currently spend on the Family Tax Benefit.
Labour force participation and labour force growth will slow as the population ages, and the tax take will fall at exactly the same time as health care and aged care costs rise.
But thanks to our robust population growth, Australia is relatively well placed to adapt.
Population growth will not stop population ageing but in conjunction with increased workforce participation and improved productivity, it can help meet the costs as Australians grow older.
Some anti-growth campaigners suggest this is some kind of pyramid scheme, where an ever-increasing number of workers is needed to pay for the growing pension and health care costs of their predecessors.
If we have the right policies, such as a shift towards 'user pays' health care and pensions (a shift that has already begun via private health insurance and superannuation), it need not be.
