As the nation ages, and children make up a smaller proportion of the population, the country is confronted with one of its biggest policy and economic challenges: how do we care for the elderly?
Author
- Liz Allen
Demographer, POLIS Centre for Social Policy Research, Australian National University
Despite increased focus on the quality and funding of residential aged care in recent years, there’s been insufficient discussion about how we address this complicated problem.
That’s likely because there are no easy solutions. It’s not something a single election cycle, or even a single government, can alleviate overnight.
But we can unpack how we got to this point, what it means for Australia and what might help.
From birth to death, we all need to be cared for, but as years of headlines have shown, Australia’s care economy faces big challenges. In this four-part series, experts examine how the country’s increasingly for-profit models of care and the government policy that spurred them on are failing those they’re supposed to protect – and what can be done about it.
A national success story
Technological advancements and increased gender equality have contributed to increased longevity and improvements in reproductive health access. Our social success has led to demographic consequences.
Australians are living longer and not replacing themselves, leading to an ageing population .
People aged 65 and over now comprise 18% of the Australian population, making the nation’s population aged and on its way to super aged.
Super aged, declining fertility
Forty-five years ago, older people represented 10% of the Australian population. The pace of ageing has accelerated faster than expected. It is also expected to continue at speed.
Ageing isn’t new for Australia and has been discussed as early as the 1930s . This was when the proportion of the population aged 65+ first reached the 7% threshold for an ageing population and declining birth rates were seen as a threat to national security.
Australians can expect to live 81.1 years (men) and 85.1 years (women), an increase of nearly ten years for men and seven years for women over the 45 years since 1981.
Australians tend to lead healthier lives than ever before too, particularly into older ages.
Growth among people aged 85+ is the greatest.
Total fertility rates (TFR) – the average number of births per woman – have declined steadily since the post-war baby boom peak of 3.55 births in 1961.
TFR has been below the 2.1 threshold for replacement since the mid 1970s, now at its lowest level of 1.48 births per woman.
Australians are increasingly not achieving their much-wanted families due to socioeconomic hurdles, including housing affordability, economic security, gender equality and climate change.
Australia risks irreversibly low fertility rates that may never recover, making population decline a real prospect in the not too distant future.
Shrinking working-age population
An ageing population presents serious economic issues due to changes in the working-age population.
For the first time in Australia’s history, people aged 65 and over outnumber children (those under 15 years). The nation has passed the maximum number of children it will ever see and the working-age population is declining.
Workers fuel government accounts
Fewer people of working age means fewer people paying taxes.
Individual income tax is the biggest contributor to government finances in Australia. Fewer individual taxpayers relative to those needing government support and services means spreading the national accounts thinner across more budget items.
Living standards risk going backwards as conflict emerges over what is funded in the national budget .
Women’s labour force participation has often been touted as a way to increase productivity and as means to help balance adverse economic consequences of an ageing population.
But with women still doing the vast majority of unpaid care work, and with more people needing that care, the future looks challenging.
Letting older people down
Older Australians contribute to care through caring for elderly parents and partners, grandparenting of young children, and volunteering. Ageing yields dividends for the caring side of the unpaid care economy .
Yet older Australians are slipping through the cracks. More than 3,600 elderly people are stuck in hospitals across Australia due to bed block in aged care facilities.
Nearly 6% of Australians report needing help with everyday activities, with most aged 65 and over.
Older Australians are expected to self-fund retirements through superannuation in increasing numbers, taking pressure off age pension costs.
The aged-care workforce in Australia is nearly 500,000 strong , and expected to increase. Many of the aged-care workers in Australia are migrants and women .
Volunteering in aged care is also promoted by the Australian government as an essential element of the workforce .
Caring disproportionately falls to women in informal care arrangements. Australian mothers are sandwiched in the caring stack of paid work, care for children, and caring for the elderly.
Fewer offspring means more formal care for the elderly. While globally there have been innovations in in-home aged care, Australia has been slow to such government-supported progress.
What might help?
The Australian government is confident artificial intelligence (AI) will aid productivity in an ageing population. But AI cannot care for the elderly.
While robotic exoskeletons and robot carers have been proposed for aged care, nothing replaces human caring .
Migration and women are increasingly being relied on to help meet the needs of an ageing population. Without serious structural reform, population pressures will place unreasonable burdens on mothers and families. Burdening mothers and families adds to already high strain, constraining family formation and childbearing even further.
Taxation changes could be one way to help balance declining workers and increasing pressures on government spending. Increasing business tax might be one part of the solution to help care for Australia’s elderly.
But broadly speaking, policymakers need to put a lot more thought into how to help address this problem. Too many are already shouldering too much, or are being left behind, and time will only compound it.
We will all be older and in need of care at some point. What future do we want?
