Speech - Turning Grey Into Gold




"Turning Grey Into Gold"




Thank you, Professor Philip Taylor, for that kind introduction, and for inviting me to speak today. Most of you here today will be aware that Professor Taylor has been researching and providing public policy advice on age and work in Australia and Europe for more than 20 years.

Bringing us here together provides a great opportunity to talk about work force issues which are close to our country's heart and crucial for our future. Among many I could acknowledge today, I'll single out Everald Compton AM who is here with me.

Everald chairs a handful of companies, and has just recently resigned from National Seniors Australia, only to take up two more chairs -

  • The Government's Consultative Forum on Mature Age Participation; and
  • The Advisory Panel on the Economic Potential of Senior Australians, which I'll talk more about shortly.

During the Tax Forum in October Everald celebrated his 80th birthday. Everald continues to contribute across all spheres of life. He is a great example of someone who embraces his age and celebrates life. There are many others here deserving acknowledgement.

The calibre of distinguished speakers and delegates from Australia and overseas is extremely high, and will make for a robust and substantial discussion across the next two days. It's a very timely discussion. The world population recently topped 7 billion. Of those, more than 700 million are over 60. By 2050, that number will be 2 billion - 10 times what it was in 1950.

While the whole population increases by about 1.2 per cent a year, seniors are increasing at a rate more than twice that, at 2.6 per cent a year. The rapid ageing of the population is a process unparalleled in human history. It's something governments around the world, as well as scientists, economists and social strategists, are paying serious attention to. It's something our government is also paying very serious attention to.

By 2020 there will be twice as many sixty-five year olds here as there were in 2009, and five times as many 85 year olds. By 2050 there'll be 50,000 Australians who notch up a century. As one commentator put it, Baby Boomers have been changing the world since the 1960s. They're about to do it again. [1]

For those of us already into our second half-century, this sounds like very welcome news. And it is. The ageing of our population is overwhelmingly a sign of improved standards of living, better working conditions, advances in medicine, and a range of other factors that have added to our lives.

For most of history, life expectancy matched Thomas Hobbes' description: 'nasty, brutish, and short'. Up until the twentieth century, surviving infancy was no easy feat. If you made it to thirty you had a better chance of making it to middle age, but even then few people lived beyond their mid-sixties.

Now, we can expect to live longer, and to have better health into our old age. This is definitely good news. And the good news is this brings many benefits not only for individuals but for industry, and for the economy.

When the pension age was set at 65 in 1908, most workers didn't live much past their 65th birthday. Now, we can expect that most people will live for twenty or even thirty years longer. This brings an enormous opportunity. Those extra years can be rich, full of meaning, and no less valuable than those of traditional working age. A big part of that is making sure seniors who want to work, can.

Last year, over-55's were around 16 per cent of the labour force, compared with 10 per cent in 1980. By 2050 nearly 20 per cent of the labour force will be aged over 55. That's a fifth of Australia's workers that we can't do without. Our economy is well placed to withstand some of the buffetings of the short term.

I'm sure you've heard me talk up, both here and overseas, our strong fundamentals. Our legacy of sound reforms and fiscal discipline, our low debt, low unemployment, robust regulation, and strong institutions. We have growth at about trend levels, which precious few other developed nations can boast, and contained inflation. All these things stand us in great stead. However, there is no doubt we are in turbulent times, with more storms brewing.

We need to have an economy and a workforce that are resilient, and fully equipped to meet the challenges ahead. In the same way we saw a big shift in the number of women entering the workforce in the 1970's and 1980's this now confronts us with our seniors.

How can we imagine not tapping into the talent, experience, skills and capabilities of this rapidly growing group of Australians? In most workplaces, having the word 'senior' in front of your title has positive connotations: knowledge, authority, responsibility, respect. Why wouldn't we want to harness those qualities and enhance our workplaces with the clear advantages of seniority?

In their mature years, many will naturally choose a well-earned retirement. Australia's retirees are often volunteers, contributing vital help out of sheer generosity. They are also childcarers. About 660,000 Australian children are cared for by grandparents. That's nearly a fifth of all children under 12.

Nobody underestimates the immense value these seniors add to our families and communities. But for seniors who want to engage in paid work - we know there are about 2 million of them currently outside the workplace who are interested in working - we need to do our best to let nothing stand in their way. To put a dollar figure to this, not using the skills and experience of older Australians costs the Australian economy $10.8 billion a year. [2]

We also know there are barriers: in attitudes and perceptions, workplace flexibility, opportunities to retrain, and even in the tax and transfer system. All of these are things we can change. And they are changing.

Participation rates for people over 55 have jumped from 22 to 34 per cent since 1994. Close to 60 per cent of seniors are participants in the work force, which puts us above the OECD average. But the US, the UK, New Zealand and Canada all have higher participation rates for seniors than we do.

Improving participation rates for mature age workers is one of the long-term challenges identified for our economy in the 2010 intergenerational report Australia to 2050: future challenges. It's something the government takes very seriously, and has taken steps to address.

We've made changes to superannuation, including:

  • a gradual increase in the superannuation preservation age,
  • Transition to Retirement rules that allow people to draw down superannuation while continuing to work,
  • tax free superannuation at age 60,
  • tax deductible superannuation contributions to age 75, and
  • a phased increase in the qualifying age for Age Pension to 67 years,
  • and from 1 July next year, there will be no age limit for superannuation guarantee contributions.

We want to make sure the tax and transfer system does not create disincentives for older people to work. We've appointed Australia's first full-time Age Discrimination Commissioner. The Honourable Susan Ryan AO, who will address this conference tomorrow, was appointed in August. Her priority, she says, is to ensure older people have economic security, whether through superannuation or the right to continue working. Economic security equals a life with dignity. [3]

Early last year we established the Consultative Forum on Mature Age Participation, of which Everald is the Chair. This will help build an evidence base around strengthening the workforce participation of mature Australians.

Everald, as I mentioned, also chairs the Advisory Panel on the Economic Potential of Senior Australians.

His fellow panel members are:

  • Professor Gill Lewin, Professor at the Centre for Research on Ageing at Curtin University of Technology, and
  • Professor Brian Howe AO, Professorial Fellow at the Centre for Public Policy at the University of Melbourne, and a former Deputy Prime Minister.

We set up the Panel in March this year, and asked them to examine how Australia can best harness the opportunities that much larger, and more active, communities of older Australians bring.

In a moment, the Panel will present me with their final report, which will contain the Panel's recommendations for the government. It sums up what Everald has been championing for so long, and what we were keen to hear from him on. To make sure we see our seniors for the benefits they bring and how we can harness those benefits for the good of the nation.

In preparing these reports the Panel held meetings in every capital city and two regional centres. The overwhelming conclusion of their search is that older Australians, for their own benefit as well as our country's, have immense potential to lift and shape our economy in the interesting times ahead.

There are still some who speak of our ageing population as a burden we have to shoulder; fewer workers to support each pensioner and so on. We need to think about this scenario not as a problem we can't afford to ignore, but as an opportunity we can't afford to waste.

Now Everald and I have had a brief discussion about the report ahead of today, and I think it's fair to say, I'm very impressed at how comprehensive it is. The report recommends that federal, state and territory governments work in partnership with the housing industry to address the challenges of housing an ageing nation.

For example, it recommends that state and territory governments remove stamp duty to help improve housing supply and encourage more efficient use of housing stock, with the revenue replaced with more efficient taxes, such as annual land tax.

Issues like affordability and appropriateness of housing will only become more important in the years ahead, and we need a comprehensive approach to meet this challenge.

The report envisages a longer-term campaign to support employers to identify and secure the benefits of hiring older workers. This is about helping individual employers plan and manage their workforce, and signalling to older workers that their contribution is valued and longer participation is viable.

The report recommends a scoping study to examine ways for commercial providers to deliver an educational channel for older people, linked to universities, using existing or emerging technology.

The report also recognises the importance of providing all Australians with access to the benefits of broadband technologies - particularly senior Australians who may have mobility issues.

And finally, the report outlines steps that can be taken to support senior Australians who want to make a valuable contribution through volunteering.

These are all such important issues to get right if we don't want to waste the massive potential of a larger group of older, active senior Australians. As Everald says, it really is all about 'Turning Grey into Gold'.

I look forward to receiving the Panel's recommendations and considering the report in detail, and to hearing the new ideas that this conference on Older Workers and Work Ability has to offer.

Thank you.

[1] "The Ageing Workforce: Turning Boomers into Boomerangs." The Economist 16 February 2006.

[2] Figure from National Seniors Australia.

[3] "Another first as trailblazer Ryan fired up by 'perfect job'." Sydney Morning Herald, 1 August 2011.