Aged productivity key to balancing the ‘Big Issues’DOWNLOAD
Given the pressure from the ageing population on health spending and productivity – projected in the 2010 Intergenerational Report – Australia to 2050: future challenges - to increase to more than 27% of GDP by 2050 – professional services firm Deloitte has urged the government to continue to remove barriers to workforce participation for mature aged people.
Deloitte Actuarial Partner Stuart Rodger said, “The $43billion infrastructure spend on the National Broadband Network will certainly help make staying in the workforce a more viable option to support aged workers work remotely. With more than 25% of government spending directly related to aged care, health and age-related pensions, there has to be a smarter focus on wealth creation and preservation, including incentives for self funded pensions,” Rodger said.
“Given that two of the three pillars described in this Inter Generational report (IGR) of productivity, participation and population are very much in the hands of the ageing demographic, the need for Australia’s “Baby Boomers” to continue to live smarter and better manage their health requirements is critical.
“To be able to work smarter with both re-skilling and technological facilitators, and to save and spend smarter should help to sustain the productivity necessary to deliver on the Government’s economic growth projections,” he said.
“The good news is that through creating greater awareness of the imperatives to deal with the issues, each Inter Generational report (IGR) can project a slightly better position than the previous one – diminishing the 40 year fiscal gap between revenues and spending from a projected 5% in 2003 to a 3.5% gap projected in 2007, to the current 2.75% projected fiscal gap for 2050 in this IGR.
“From IGR1 to IGR2 the improvement was driven by assuming reduced government spending and higher GDP per person. More fundamentally in this IGR, the change from IGR2 to IGR3 is driven by assuming a younger population with more births and greater migration (creating opportunity for increased productivity) as well as further tightening the government spend per person.
“Together these reports show how something like the IGR can be a useful discipline to help us change the paradigm we live by,” said Stuart Rodger.