Facts and figures
Population and labour supply
Implications
References
The average age of people in Japan, Sweden and Germany is higher than the average age of Australians. These three countries enjoy high standards of living and strong economies.
Improved health, greater life expectancy and the trend to smaller families are having a significant impact on the demographic character of Australia and most other industrialised countries.
Population and labour supply
Fertility rates in Australia and Queensland have declined over the past 30 years.
- In the 1960s the fertility rate was 3.43 babies per woman of fertile age. In 2002 the rate had dropped to 1.76, and it is predicted to drop to 1.6 by 2011.
- The proportion of Australia's population aged over 65 will almost double over the next 40 years - from 13 percent in 2003-04 to 24.5 percent in 2044-45.
- During the same period, the proportion of people aged up to 19 years will decrease - from about 26.9 percent to 19.5 percent. The proportion of those aged 20 to 64 years will drop from 60.3 percent to 54.4 percent.
- Currently, there are 5.2 people in the potential workforce for every person aged 65 or more years (an age dependency ratio of 19 percent). By 2044-45, this will have fallen by more than half, to less than 2.4 (a ratio of 41 percent).
The following figure shows the expected changes to occur in Queensland over the next two decades:
Queensland Age Sex Structure 2005 and 2025
Labour supply growth is slowing down because of the ageing population - and it will continue to do so.
- Currently, about 45 percent of 55 to 64 year old Australians are employed.
- Currently, 70 percent of Queensland companies report problems finding skilled workers.
- In the next five years, some 170,000 people will retire from the Queensland manufacturing sector, however only 40,000 are being trained to replace them.
- Many older workers retire involuntarily, either through illness or redundancy.
- In the seven years from 2003-04 to 2010-11, it is predicted that the number of workers available in Australia will increase by about 1 million. The same level of growth is expected to occur in the 21 years between 2023-24 and 2044-45.
- The projected drop in the proportion of the population participating in the national workforce is from about 63.5 percent in 2003-04 to 56.3 percent by 2044-45. Queensland figures are slightly higher (about 64.8 percent in 2003-04 dropping to 57.4 per cent by 2044-45).
Implications
While the full effects of the ageing population will not be felt for several decades, there are serious implications for business and industry that choose to be complacent.
- There will be greater competition in the workforce for younger people as growth in the 'prime age' workforce (26 to 40 years) continues to slow.
- Businesses with a high proportion of mature age workers may experience a significant loss of people and corporate knowledge as employees reach retirement age. This may leave businesses with large numbers of younger people without the corporate knowledge or experience to provide a broad overview of the organisation, affecting performance and competitiveness.
- Failure to increase participation and make best possible use of the available labour force will make it more difficult to address the skills shortage. This will result in a slowing of economic growth for both Australia and businesses.
- There will be a dramatic increase in the financial burden on those who are working because of increased government spending on retirement benefits, health and aged care associated with the ageing population.
References
Australian Bureau of Statistics, catalogue number 3105.0
Australian Bureau of Statistics figures - Director-General address to Commerce Qld Feb 2005
Training to Prevent Exclusion of Older Workers, Megan O'Connell, Centre for Public Policy, University of Melbourne
Economic Implications of an Ageing Australia, Productivity Commission 2005
Population Projections, Australia, Australian Bureau of Statistics, catalogue number 3222.0
The Age Quake - Professor Louise Rolland, Swinburne University of Technology
Last update July 12, 2006