An interesting excerpt taken from PwC’s synopsis of the findings of the Government’s 4th Intergenerational Report 2015.
Australians will be older in 2055. This appears starkest in the oldest age categories. In 2055, there will be close to two million people aged 85 or over; almost five per cent of the population. There will also be 40,000 people over 100 years old, a ninefold increase on today and swamping the 122 centenarians in 1974-75.
A substantial factor behind the increased numbers of elderly is increases in life expectancy. A man born today can expect to live 91.5 years, a woman 93.6 years.
For those born in 2055, life expectancy will be an even higher 95.1 and 96.6 years for men and women respectively. The net result of this ageing that there will be only 2.7 people aged 15 to 64 for each person over 65 years.
This is down from the current 4.5 people and a massive drop from the 7.3 people in 1975. Of the older population, a greater proportion will be working. There will be 17.3 per cent of over 65s in the workforce, compared to 12.9 per cent today. As such, the ratio of under to over 65s may not be the best measure of whether there is a sufficient tax base to support the ageing population.
More women will also be working, with participation increasing from 66 per cent to 70 per cent over the next 40 years. The combination of increasing life expectancy and high immigration will mean a much more populous Australia in 2055.
The expected 39.7 million Australians is a 60 per cent increase on today. Despite the warnings implicit in the IGR, Australians in 2055 will be much wealthier. Real income per person is projected to be $117,300 in 2054-55, compared to $66,400 today. However, this increase in wealth is a slowdown on growth over the previous 40 years.
Further, income growth may be even lower if the productivity assumptions in the IGR are not met.
Supporting a larger, older population
The increased number of elderly will require substantially more aged care places; 955,000 aged care places in 2055, compared to the 252,000 places available in 2012.
These places will need to deal with a substantially higher level of dementia. About 10 per cent Australians over 65 years old have dementia. At this rate*, the number of Australians with dementia would increase from 308,000 people in 2011 to 890,000 people in 2055.
Even though the focus of the IGR tends to be on the aged, there is substantial population growth in all age groups. This affects the number of students and schools, with another 5,000 schools required in 2054-55 to cater for the 2.1 million extra students.
Population growth over the next 40 years will also have major infrastructure implications. The increase of 15.9 million people is 3.3 times the current population of Sydney or 7.1 times that of Brisbane. Infrastructure of that scale will need to accommodate them. If car ownership continues at current rates, Australian cities will have 11.9 million more vehicles than on the road today.
* Based on Australian Government target of 113 places per person over 70 years of age in 2055