The Commonwealth Treasury recently issued at detailed paper (The 2010 Intergenerational Report), looking at Australian developments and challengers over the next 40 years.
Some interesting facts from the report include:
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Population to continue to increase - Despite the forecast for slower population growth, the population is still expected to increase from 22 million now, to 36 million by 2050.
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Population to continue to age - By 2050, those over 65 will more than double, and those over 85 will more than quadruple. This will result in a significant aging of the population.
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The "dependency ratio" will continue to rise - This is the ratio of those 65 years and older (and potentially depending on welfare) to those in the workforce and paying taxes. The number of working age people to support every person aged 65 and over will fall from 7.5 in 1970, to an estimated 5 in 2010, to a projected 2.7 in 2050. We are however in a much better position than Japan, where it is projected to have 1.4 people working for every person aged over 65 by 2050.
Some key outcomes from the report:
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Increasing productivity growth - Producing more output with proportionately fewer workersis the key to continued growth with an ageing population. Investments in Australia's education, skills and infrastructure base will be required to provide a lasting improvement in productivity.
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Boosting labour force participation - The Government has already introduced a number of initiatives to boost labour force participation. These include increasing incentives to work through personal income tax cuts and increases to the Child Care Tax Rebate.
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