Intergenerational Report: Australian population to hit 39m by 2055, but ageing fast

AUSTRALIA’s population is projected to reach 39.7 million by 2055 with an explosion in people living beyond 100.

AUSTRALIA’s population is projected to reach 39.7 million in the next four decades with an explosion in the number of people living longer than 100 years.

The dramatic increase in the number of centenarians — forecast to be about 40,000 Australians in 2054-55 — is well over 300 times the 122 people who reached the milestone in 1975.

The findings of the 2015 Intergenerational Report “Australia in 2055’’ confirm that Australians will live longer and continue to have one of the world’s longest life expectancies.

With longer lives, the expectations of Australians will also rise.

In 2054-55, life expectancy at birth is projected to be 95.1 years for men, up from 91.5 years today. Women will live to 96.6 years, compared with 93.6 years today.

And some experts suggest medical advances to come may mean some people could live to 140.

“Not only will Australians live longer, but improvements in health mean they are more likely to remain active for longer,’’ the IGR says.

But this rapidly greying population also presents a demographic time-bomb for the nation with the numbers of those in the labour force declining as the community ages.

There will be fewer people of traditional working age compared with the very young and the elderly.

ROAD AHEAD: bigger, older broke

A lower proportion of Australians working will mean lower economic growth.

The IGR calls for adjustments to policy settings to meet the community demands and expectations including measures to increase workforce participation by women, younger and older Australians.

The average annual rate of population growth is forecast to be 1.3 per cent over the next 40 years, slightly slower than the average growth rate of 1.4 per cent over the past four decades.

At this rate, Australia’s population is projected to be 39.7 million in 2055 — up from 23.9 million today.

Economic growth is projected to be 2.8 per cent per annum on average over the next 40 years, with annual growth per person of 1.5 per cent.

The annual income of the average Australian rises from $66,400 today to $117,300 by 2055 in today’s dollars.

The IGR says “Australians can have a positive and prosperous future’’ but the economic growth rate is forecast to be slower than the 3.1 per cent per annum or 1.7 per cent person achieved over the past 40 years “due to an ageing population and gradual decline in the participation rate’’.

The projections are stark; revealing the number of people aged 65 years and over is projected to more than double in the next 40 years.

The number of Australians aged between 15 and 64, the traditional working ages, compared with the number of people aged over 65 has fallen from 7.3 people in 1975 to an estimated 4.5 people today.

The IGR predicts by 2055, this will halve and there will be just 2.7 people aged between 15 and 64 for every person aged 65 and over.

The proportion of Australians participating in the labour force is also expected to decline as the community ages, with the participation rate for those aged over 15 years to fall to 62.4 per cent, compared to 64.6 per cent today.

“A lower proportion of Australians working will mean lower economic growth over the projected period,’’ the IGR says.

“But there are clear opportunities to increase workforce participation by supporting Australians to get and keep jobs.’’

These measures included increasing the participation of women and young Australians in the workforce, and the report says “embracing the potential of older Australians’’.

In 1975, only 46 per cent of women aged 15 to 64 worked. Today, it has risen to 66 per cent and is projected to climb to 70 per cent in 2054-55.

Strong growth in workforce numbers is expected to come from older workers.

The IGR suggests the proportion of Australians aged over 65 still in work will grow from 12.9 per cent today to 17.3 per cent in four decades.

“This provides a significant opportunity to benefit from the wisdom and experience of older Australians, but there is more we can do to embrace this trend,’’ the IGR says.

2015 INTERGENERATIONAL REPORT

PREDICTIONS FOR 2055:

— The population will rise to 39.7 million in 2055, compared with 23.9 million today (assuming net overseas migration remains at 215,000).

- Life expectancy at birth will be 96.6 years for women and 95.1 years for men, up from 93.6 years and 91.5 years today.

— There will be about 40,000 people aged over 100, and 2 million people aged over 85.

17.3 per cent of over-65s will be participating in the workforce, compared with 12.9 per cent today.

— Real per-capita GDP will increase on average by 2.8 per cent, compared with 3.1 per cent over the past 40 years.

— The government will spend $3200 per person on age and service pensions, compared with $2000 today.

— Aged care spending as a proportion of GDP will increase from 0.9 per cent of GDP to 1.7 per cent.

— Health spending per person will jump to $6460, compared with $2830 today.