The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

26 August 2011

Doorstop Interview with
The Hon Mark Butler MP
Minister for Mental Health and Ageing
and
Mr Everald Compton AM
Chair of the Consultative Forum on Mature Age Participation

Doorstop Interview

Brisbane

26 August 2011

SUBJECTS: Realising the Economic Potential of Senior Australians report; Australian economy; global outlook

TREASURER:

Well, look it's great to be here this morning. We've just had a very enjoyable morning tea with a number of senior Australians to talk about the very important work that Everald Compton has been doing with his committee, Professor Brian Howe, and of course Gill Lewin. It's great to be here and it's great to see the report, which Everald has here today - Realising the Economic Potential of Senior Australians. This is a very, very important piece of work.

The ageing of our population is a very important issue for the future of our country. Too often it's cast as a problem. What this report emphasises is what a great opportunity Australia has to make of the ageing, of our population. The number of Australians aged 65 and over will increase from 14 per cent of our population to 23 per cent in 2050. That is, they will go from 3 million Australians to 9 million Australians.

Elderly Australians have worked hard to make our economy strong. They deserve dignity and respect in their retirement years and they also deserve the fact that governments appreciate the challenges that lie ahead and need to put in place the appropriate policies to ensure they have an adequate standard of living but also other public policies which ensure they can participate fully in the life of our country.

One of the things I'm proudest of is the very substantial increase we put in place to the age pension, a historic pension increase, which recognised the importance of people having a decent standard of living on the age pension. And the other reform I'm very proud of over the years has been the establishment of national superannuation to ensure that working Australians can build up a nest egg for the future. Retirement income policies are very important but so are a whole host of other policies. Everald, for example, has pointed to the fact that there will need to be a revolution in the way in which we build and supply housing to senior Australians. That is just one area of great importance. There are many others and these have been canvassed in the report.

So I'm looking forward to receiving two more reports from Everald by the end of the year and then having a very full community discussion and debate about what we must do to prepare for the ageing of our population.

Other countries in the world have ageing populations and they're not looking to the future. Countries like Japan are being profoundly affected by the ageing of their population. In Australia we approach this challenge from a position of strength. We have been ahead of the game through great reforms in the pension system, in national superannuation, and with further reforms and a change of policies in the future we can turn this into a further economic strength for Australia to make our economy and our community even stronger. Now with those few words I'll hand over to Mark Butler just to say a couple of things and then I'll hand over to Everald. Mark.

BUTLER:

Well, thank you Deputy Prime Minister and Everald and Gill and Brian for being here. This is an incredibly important report, part of what the Prime Minister has described as a broad agenda around ageing. This year, the first, the oldest of the baby boomers starts to turn 65 and this really crystallises a big change in our community. Over the last 100 years we've added 20 to 25 years of life expectancy. Older Australians today are healthier, they are wealthier, they have a broader range of skills and training and wonderful opportunities to continue to contribute and have connected lives for those 20 or 25 years of retirement.

This does bring some challenges which is why we're engaged in a strong health reform process to give older Australians opportunities to stay healthy, physically and mentally healthy, for as long as possible. We have an aged care reform process under way and, as Wayne has indicated, we have a very strong agenda around retirement incomes with the largest ever increase to the pension in its 100 year history as well as ambitions to increase superannuation guarantees from 9 per cent of income to 12 per cent of income. But we do need some fresh thinking about ways in which we're going to be able to harness the economic opportunities presented by older Australians to liberate them as individuals, to continue to be connected to the community and engage productively in the community.

But also recognising, as Everald's report says, this is an enormous market that is about to hit Australia and a range of other countries in our region. Organisations and businesses are going to need to be able to respond to that market so that recreation, leisure and a range of other services are well suited to a growing group of retired Australians.

There are some wonderful little bits in this report. For example, the age group 65 to 84 years of age is the fastest growing group of internet users in our community. There are wonderful things there that will give some very fresh thinking to the Government about ways in which we can ensure that the benefit of adding 20 to 25 years of life expectancy is that those years are healthy, they are productive, they are connected and they are participative.

This, as the Deputy Prime Minister has said, is the first of three reports that the committee will be presenting over the course of the rest of this year. This is a bit of a scene setting report as Everald will say and poses a number of questions, particularly to older Australians that the Committee wants feedback about to inform the content of their second and third report. But, along with Wayne, I'm very, very grateful for the effort that the committee has made but also the effort that the participants in their meetings around the country have made to contribute to this fresh thinking about ways in which we can harness the opportunities presented by the ageing of our population.

TREASURER:

Everald.

COMPTON:

The report that will be handed to Wayne today sets out the issues that face Australia and the opportunities that are there for Australia, and it's quite clear that the greying of Australia provides an opportunity for a golden economic era for Australia because we'll have a very strong ageing market that we have to adjust to capitalise on and there will be many opportunities for young people to establish industries that will serve this market.

Young people will be the ones who will teach them information technology and household technology which older people will need in order to survive their independence. Young people will create recreational industries for older people to provide them with a broad variety of recreation in their senior years. Innovative architecture is going to be needed – an enormous challenge to build housing that particularly suits older people and not just build them a little house. There'll be education, will have an enormous opportunity to capitalise of the desire of older people to learn in their later years.

So we're trying to say in this report, not just to Government - which Wayne's encouraged us to say things to Government - but to say to commerce and industry. There is an enormous market out there for you to capitalise on and the time to do that is now. And one of them in particular is the fashion industry in Australia, which does nothing got provide fashions that suit older women and older men.

TREASURER:

You doing alright.

COMPTON:

I'm doing alright, but the fact is that they're missing an enormous market simply because they don't recognise that it's there. Now we intend in December not only to say to Wayne how he should spend the Government's money and to tell Mark what policies we should have, but to say to commerce and industry an economic boom is out there if you're innovative enough to do something about it.

(Everald Compton presents the Deputy Prime Minister and Treasurer with the first Economic Potential of Senior Australians Report)

TREASURER:

Okay can we just take some questions on the report first and then I'll take other questions after that. So have we got any questions to any of the panel on the report?

JOURNALIST:

How are you going to be able to change businesses attitudes and perhaps employers' attitudes to harness this (inaudible)?

TREASURER:

Well, I think it's going to be very important for business to have senior Australians participate in the workforce if they wish to. This is now an economic imperative for business because what we are going to see in the future is that we will have shortages of labour given the strength of our economy and business will find it very productive I think and they will see on their bottom line the advantage of recruiting elderly Australians. This is an economic imperative for many businesses right now and it's going to become even stronger in the future. But this is not necessarily about the work force. It's just part of a wider story, the extent to which elderly Australians can participate more generally in our society, work is part of that but it is far broader than that to the extent to which elderly Australians will participate further in community groups, the extent to which they volunteer. These are all very big issues and the report touches on all of them

JOURNALIST:

Is there a single problem that you see needs to be fixed first?

TREASURER:

Well, I'll let Everald say a couple of words but one that has been mentioned to me, and I know it's been mentioned to Everald and the committee, is that there is in some parts of the business world a discrimination against elderly workers and it's an issue we have to deal with. That's just one. It's not necessarily the dominant one and I think it will lessen over time because demand for elderly workers will increase substantially, but it is one that is raised frequently.

COMPTON:

Employers are missing out on about - well the nation is missing out on about $10 billion that older people could add to the economy if they were allowed back in the workforce. It's an immense situation. When older people are employed, they're reliable, they're loyal and their experienced and they are not looking for a better paying job next week and you can't get a better employees than that and the industry is missing out on an enormous opportunity. The discrimination is quite rife but another panel that Wayne and I work on is specifically addressing the fact that discrimination against older people in the workforce has to change and that will have an enormous effect positively on the Australian economy.

JOURNALIST:

Do you see the Government having to rethink the retirement age any time soon?

TREASURER:

Well, we made a change there two budgets ago recognising the increase in age of the population. We did make an update there and I don't think we're getting any further recommendations in that area. I'm not sure.

COMPTON:

Well, we're not going to, well put it this way, the panel is looking at the issue of retirement ages but what we are looking at is encouraging older people to stay in the workforce voluntarily not compulsorily force them into the workforce. They'll live longer. They'll have a better lifestyle if they stay in the workforce and there are many incentives that can be given to older people to stay in the workforce and I think we'll have them coming in in droves if they have the right incentive to do that.

TREASURER:

I'd like to make it very clear that we're not considering any change to the retirement age and what Everald is talking about is choice. If people want to work and want to earn a bit of extra cash how does that fit in with all of our other public policies? That's what it's really about. It's about the choice. Anything else on the report? Okay, we'll go onto other questions.

JOURNALIST:

Okay, the Governor of the Reserve Bank has today said that the outlook for the global growth has now weakened. It that a fair assessment?

TREASURER:

Well, there's no doubt that as a consequence of the financial turbulence and uncertainty we've seen in both Europe and the United States that that will impact upon global growth, that will then impact upon growth domestically in Australia and of course upon our budget. But it is far too early to be making any accurate predictions about the extent of that impact. In this environment, it is vital that decision makers such as myself are linked into what is happening in the global economy. And to that end I am going to China on Monday morning, and in a few weeks time I'll be off to the IMF-World Bank meetings. It's very important to have an accurate assessment of what is going on in the global economy but I would make this point: growth in our region is strong. Our region - despite the weakness in the United States and despite the weakness in Europe over recent years - has continued to perform strongly and I have no reason to believe that it won't continue to perform as strongly into the future but there will be an overall impact on global growth from these events but it's too early to say by how much.

JOURNALIST:

This will fuel debate though on the Government's commitment to bringing the budget back into surplus.

TREASURER:

Well, the government expects to bring the budget back to surplus in 2012-13 and we're determined to do that but there's no doubt that the overall environment has become much more uncertain and it makes it tougher to do that.

JOURNALIST:

Just before when you said the regions, did you mean Queensland or Australia?

TREASURER:

No when I said the region I meant the Asia Pacific.

JOURNALIST:

The Governor of the Reserve Bank has also said that coal production is going to be delayed by another year because of the summer of disasters. Is that further devastating for the …

TREASURER:

No, there's nothing new about the Governor's statements on coal and the impact on coal production of the floods in Queensland and Cyclone Yasi. We are acutely aware of all of that and we've already accounted for that in our estimates.