25 July 2018

Address to Council on the Ageing (COTA), Sydney


‘The aspiration of ageing’

Check against delivery

Aspiration has no age limit. That’s what we believe.

Aspiration doesn’t grind to a halt when you hit 65. It is not the exclusive domain of younger generations, eyes wide open, world at their feet.

To be financially secure; setup for the years to come. To be fit and healthy. To build on or broaden your career, to learn new skills, seek out new experiences and opportunities. To be independent. To be safe. To be respected. These aspirations don’t fade away as you get older.

Likewise, choice and opportunity should also not retire. We will continue to enliven and encourage people to realise their aspirations at whatever age they may be.

This year’s Budget was once again a plan for a stronger economy.

Our Budget is a plan for a stronger economy because we believe that from a stronger economy all else flows, most importantly the essential services that Australians rely on.

I could come here today and I could give you any number of commitments about services, particularly when it relates to aged care or anything else, but they wouldn’t mean anything at all if the Government didn’t have a plan for a stronger economy.

If you don’t have such a plan you can’t afford to implement any of those policies.

Frankly, I wouldn’t believe any political party or any politician who stood at any platform and made any commitment to you unless they had a plan for a stronger economy to pay for it.

Now, our Budget sets out what that plan is.

I have just returned from two days in Argentina at the G20 and the Australian economy is the envy of all of those economies.

Twenty-seven years of consecutive growth, real GDP growing at 3.1 per cent, the strongest jobs performance in our economic history – 95,000 young people have got jobs in the last fiscal year. That is the strongest fiscal year jobs growth for young people since 1989.

We have a strong economy and the plans we are putting in place for an even stronger economy are being realised.

That is the guarantee that underwrites; whether it is on aged care, on welfare, on pensions, on disability services, the Pharmaceutical Benefits Scheme – all of these things. Unless you have a stronger economy, any commitment in that area, any empathy in that area, any passion that might be proclaimed in that area cannot be relied upon unless you have such a plan to ensure the economy continues to grow and underwrite all of these things that Australians rely on.

Now, as part of this year’s plan for a stronger economy we have addressed the challenges of ageing on our economy but more broadly.

Dealing with this has been a key part of our plan.

It involves ensuring that choice and opportunity, and the ability for all Australians to build their aspirations for a longer and healthier life – engaged, informed and empowered – all of these are realised.

Our More Choices for a Longer Life package is not just good social policy to increase engagement by older Australians, but it is a targeted and proactive step to prepare our economy for an ageing population.

An ageing population means Australians are living longer and healthier lives. I don’t know about you, but I think that’s a pretty good thing. When we talk about ageing sometimes, you would think when you hear from public policy makers or bureaucrats or economic commentators that it is some sort of economic curse that people are living longer and healthier.

Cheer up! It’s good news. It’s great news and we need to think of it like that.

The ageing of our population does not have to be an economic curse, an inescapable drag on our future economic growth or a mogadon for productivity.

Of course these are all genuine risks if the ageing of our population is not properly managed, and not prepared for. If you go into it not understanding the opportunities that present, then it can become a self-fulfilling prophecy.

Australia is far from alone in having to navigate its way through the challenges of an ageing population.

This has been a global trend for advanced economies since the share of the population of prime working age peaked almost 20 years ago.

For parts of northern Asia and Europe, the speed of ageing has been swift, with Japan’s median age shifting from 35 in 1985 to 46 in just two decades, and is on track to reach 53 in 2040.

In South Korea, the scale of ageing has been even more pronounced, with the median age jumping from 24.3 in 1985 to more than 40 in 2015. Over the same time frame, Germany’s median age has surged from 37.2 to 45.9.

It is important to note that while Australia’s population has also aged – with our median age jumping from 31 to 37 in the same three decades – our experience has been markedly different to our peers.

We have not only remained one of the youngest populations among the advanced economies, the growth in our working age population has been consistently high compared to our global peers.

And that is largely due to three critical factors that have helped inoculate us from some of the extreme outcomes that occur from a rapidly ageing population.

Firstly, we have run an migration program that prioritises young, skilled migrants, bringing in skilled labour that our economy needs, combating the shortages that were hampering some industries and improving the demographic profile of the workforce.

This has been a major contributor to the changing dynamics of our working-age population over the past 10 years, which has made our controlled migration program the envy of advanced economies.

As a former Immigration Minister, I notice, no matter where you go in the world today, the world looks on at Australia’s immigration program as being the standard.

The Shaping a Nation report, released jointly by Treasury and the Department of Home Affairs earlier this year, found that Australia’s focus on skilled migration has demonstrated positive effects for economic growth, as migration lifts potential GDP and GDP per capita through increased population, productivity and participation.

The report found migration has helped boost Australia’s participation rate, allowing it to increase 1.4 percentage points over the period of 2000 to 2016, whereas in the absence of migration it would have fallen 2.1 percentage points.

The latest jobs data for May showed our participation rate at just below our historical peak at 65.7 per cent, this compares to 61.7 per cent in Japan, 62.9 per cent in the United States and 65.5 per cent in Canada.

So, more Australians of working age out there and active in the labour market.

The report also noted that Australia’s targeted migration program has slowed the impact of ageing on our economy, allowing the economy and society time to adjust and provision for a society where fewer people are working and delivering income tax revenue, but increasingly drawing on government services.

As noted by the Reserve Bank recently, Australia’s median age and old-age dependency ratios are projected to increase by less than those of other advanced economies, which would lead to Australia having one of the youngest populations and workforces of those advanced economies.

This stands in stark contrast to Japan and many countries in Europe, where population growth and ageing populations are projected to be a drag on potential growth in those economies.

Secondly, we have seen a rise in female labour force participation.

Female labour force participation is at record highs in Australia, having risen consistently from 44.7 per cent in 1980 to the all time high of 60.6 per cent recorded in June.

For comparison, it was 58.7 per cent when the Coalition came to office – since that time we have seen an increase of more than 640,000 women in the workforce.

As the RBA noted in its December quarter bulletin: “rising female workforce participation over the past few decades has largely made up for the demographic effects of ageing.”

And thirdly, Australians are choosing to work for longer. I stress, choosing, to work for longer.

In the decade to 2016, the participation rate in advanced economies for those aged 65 years or above has increased by an average of two percentage points.

Australia’s growth rate just eclipses that average, growing at a faster rate than the US, Japan, France and Italy. In fact, the participation rate for older workers in Australia has doubled since the early 2000s.

There are now over half a million people over 65 years of age working and, I am pleased to say, over 40,000 of them found new jobs over the last year. Of the record jobs growth we saw in 2017 a large part of that success came from increased participation among older workers with almost one third of the 416,000 jobs created in the year to February 2018 was from Australians over the age of 55.

So about one-third, one in three of those jobs that were created in that year were for Australians over the age of 55.

This growth can be attributed to improved health and wellbeing of older workers, changes to workplace culture that support older workers remaining in the workforce for longer, automation and the shift to less physically demanding jobs, as well as insufficient retirement savings and increased age requirements to receive the pension.

This is growth we want to see maintained.

It’s not about forcing older Australians to keep working. It’s about giving them the choice if they want to keep working. It’s about providing pathways for older Australians to either continue using their skills and experience, or change tack altogether and seize new opportunities.

The choice is yours.

Opportunity was exactly what 99-year-old John Johnston seized last month.

Retirement was a coat that never did quite fit John, the co-founder of vacuum cleaner retailer Godfreys. He would miss the action too much.

So he went out and bought controlling share in the company – A 99-year-old entrepreneur.

There’s a phrase we don’t hear often enough: 99-year-old entrepreneur. I hope we hear it more often.

One of his first public comments on reacquiring the company was: “I don't think we're doing enough on social media.”

It doesn’t have to be everyone’s story. Make your own. The choice is yours.

The best thing we can do as a government is fight to protect your right to choose, and the freedom that brings, and provide the necessary tools, programs and policies to keep older Australians engaged, informed and empowered.

More Choices for a Longer Life Package based four key elements:

  • Jobs and skills
  • Finances for a longer life
  • Supporting choice and a healthy life, and
  • Safeguarding quality and rights.

To boost jobs and skills, the Government is providing $17.4 million to fund the Skills Checkpoint for Older Workers Program.

The Skills Checkpoint will provide individually tailored assessments and referrals on how workers can best use their existing skills in the workforce, or identify opportunities for upskilling.

For workers identified through the check as being of highest need, the Government is providing $19.3 million to fund the Skills and Training Incentive.

In a tightening labour market, older Australians will have more opportunity to continue their working lives and have more choices open to them.

However, without access to skills and training, many older Australians who want to work will remain outside the workforce. This would be a loss to Australian businesses as older workers are more likely to work part-time than the general population.

Of those people employed over 65 years of age, 55 per cent are in part-time work. This compares with the 32 per cent of employed persons nationally who work part-time.

In other words, older workers bring skills to workplaces around Australia that may not have demand for a full-time position. This flexibility is invaluable.

But we understand, despite the benefits of experience, that some firms are reticent about hiring older workers.

Some of this relates to myths like that workers aged over 65 cannot access workers compensation.

While there are some age-based limitations within workers compensation schemes, this is not universal. Employers should also know that we are reviewing these limitations because employment frameworks need to facilitate employment, not impede it.

To make older workers more financially attractive to employers, we’ve expanded access to the Restart Wage Subsidy for Australians aged over 50.

This measure provides up to $10,000 to employers to support workers to continue their career – $6500 up to 12 months with a further $3500 if the job lasts more than a year.

This measure aligns with the Collaborative Partnership on Mature Age Employment we’re undertaking with the Age Discrimination Commissioner, Dr Kay Patterson, as well as businesses, peak bodies and other experts to drive cultural change in businesses’ approach to taking on mature age employees.

Our approach accommodates the fact that there are practical issues around employing older Australians which governments need to address, aside from issues of prejudice, misconceptions and stereotypes which limit opportunities for older workers.

We need to work together to start changing this way of thinking; and I commend COTA on their work in this field.

On the other side of the ledger, entering the workforce can create financial issues for the job seeker. These are addressed by the Finances for a longer life component.

Tax and welfare payments should not be obstacles to re-entering the workforce. The best form of welfare is a job.

That is why in this year’s Budget we increased the Pension Work Bonus from $250 to $300 per fortnight, and extended the Bonus to self-employed individuals.

This means age pensioners will be able to earn an additional $50 per fortnight (around $1,300 a year) without reducing their pension payments.

Self-employed people will now also be eligible for the Bonus and will be able to earn up to $300 per fortnight ($7,800 a year) without affecting their pension.

The Government is also expanding the Pension Loans Scheme to all Australians of Age Pension age including maximum rate age pensioners and self-funded retirees.

This measure will be accessible from 1 July 2019.

It will give older Australians a further option to boost their income by drawing down on the equity in their own home.

This complements the support we have provided to removing the barriers to downsizing – giving older Australians greater choice in how they can boost their income in retirement.

Under the Pension Loans Scheme, full rate pensioners will be able to increase their income by up to $11,799 (singles) or $17,787 (couples) per year by unlocking the equity in their home.

Participants will have the flexibility to start or stop receiving PLS payments as their personal circumstances change, and generally repay the loan once their home is sold.

The PLS means older Australians can increase their disposable income above the value of their pension by accessing equity in their home without leaving their home.

For some, this initiative won’t suit their circumstances; we understand, one size won’t fit all.

In fact, you’ll notice that our initiatives, especially in aged care, seek to accommodate individual circumstances.

So if you do wish to sell, we’ve removed barriers to downsizing.

This will help older Australians to move from a large home that no longer meet their needs.

People aged 65 and older can now make a non-concessional (post-tax) superannuation contribution of up to $300,000 from the proceeds of selling their home.

This is on top of existing contribution limits.

This means older Australians can reduce the size of their home, and the bigger bills associated with a large home such as increased electricity and heating costs, while increasing their disposable income through superannuation.

Also from 1 July 2019, the Government will provide more time for Australians aged 65 to 74 to get their financial affairs in order by introducing an exemption from the superannuation work test.

This exemption will apply where an individual’s total superannuation balance is below $300,000 and will permit voluntary superannuation contributions in the first year that they do not meet the work test requirements.

Currently, the work test restricts the ability to make voluntary superannuation contributions for those aged 65-74 to individuals who self-report as working a minimum of 40 hours in any 30-day period in the financial year.

The measure will support a higher standard of living for retirees and expand retirement income options to meet changing retirement needs.

We’ve done this as there’s no reason why Australians shouldn’t be able to keep adding to their superannuation income beyond 65. As we know, Australians are living longer – and living better for longer.

To encourage the development of new innovative income stream products, the Government is clarifying how these products are assessed against the Age Pension means test.

We will also require superannuation fund trustees to develop a retirement plan for members and offer a wider variety of products, and provide more information to help consumers compare products.

Our package also supports choice and a healthy life.

Unfortunately, not all older Australians will be able to work as long as they wish or have the choices available that they thought they would have.

Half of older people had some degree of disability, but three-quarters reported their health as good, very good or excellent.

But, this can change suddenly, and we need to be prepared.

The More Choices for a Longer Life Package will see the Government provide $1.6 billion to fund 14,000 additional level 3 and 4 home care packages over 4 years.

By 2021-22, over 74,000 more high-level home care packages will be available, an increase of 86 per cent from 2017-18 numbers.

We will continue to support those who access aged care services, including those in regional and remote areas, providing $105.7 million over 4 years to support the National Aboriginal and Torres Strait Islander Flexible Aged Care Program and an additional $40 million in capital grants over 4 years for aged care providers in regional, rural and remote Australia.

To help Australians make informed decisions about their care needs, we are investing $61.7 million to introduce additional functionality to the My Aged Care website, making it easier for consumers and their families to navigate the aged care system.

In addition:

  • $82.5 million will improve access to mental health services for people in residential aged  care facilities,
  • $20 million will support older Australians to remain connected to their communities, and
  • $22.9 million will promote increased physical activity.

Through these measures, we hope to keep people active and healthy for longer, but to provide access to the services, not just when they need them but where they need them.

These measures are in addition to the record levels of funding for public hospital services with a new five-year public hospital funding agreement that will deliver more than $30 billion in additional funding between 2020-21 and 2024-25.

And the Medicare Guarantee Fund is continuing to guarantee funding for the Medicare Benefits Schedule and the Pharmaceutical Benefits Scheme, ensuring that Australians can be certain that they will continue to have access to the essential health care services they need.

And finally, our package seeks to safeguard quality and rights, ensuring our most vulnerable are not taken for a ride and the dignity of older Australians is protected.

Care for our oldest Australians is a growing challenge – for families who have to make tough decisions, and government, which regulates the industry.

Families are justified in demanding that the institutions which care for their relatives actually do so, which is why the government is working to ensure that the regulatory framework that safeguards aged care quality meets the challenge.

The Aged Care Quality and Safety Commission will be established and regulatory settings will be strengthened and made more transparent.

Scheduled accreditation visits to residential aged care facilities are no more.

These visits have been replaced with unannounced audits. This will ensure that safety and quality care standards are maintained at all facilities at all times – not just when they know they’re being assessed.

Residential aged care providers will be assisted to transition to the new consumer-focused quality standards through a $50 million Quality Care Fund, helping to ensure that people in residential aged care can be confident of safe, quality aged care.

The Government will also provide $22 million to protect older Australians from abuse, including by funding trials of specialist elder abuse support services – a hidden epidemic in our community.

We’re extending support for initiatives, including developing a National Plan on Elder Abuse with the States and Territories; undertaking national prevalence research to expand the evidence base on elder abuse; and establishing an online Elder Abuse Knowledge Hub.

In a broad sense, the Turnbull Government’s economic plan – which is working – is also delivering for older Australians.

Personal tax reform to smash bracket creep and reward hard work. More competitive tax rates for our businesses that are driving investment, creating jobs and lifting wages. Guaranteeing the services older Australians rely on.

All possible, all paid for, all secured by a stronger economy.

This is why we have relentlessly pursued economic growth, because a strong economy benefits all Australians, young and old.

But this is what we won’t do.

We won’t support unfair tax grabs on retirees and pensioners who have worked hard, saved hard and have merely invested in Australian companies to give them an income in retirement.

We will allow them to keep their tax refunds. For some retirees and pensioners, this is their only income.

That’s why out of their $200 billion plus taxes on the Australian economy, Labor’s Retiree Tax is perhaps the cruelest tax of all.


In wrapping up, I want to personally thank COTA, and its chief executive Ian Yates, for your support and input into creating the package.

As COTA noted about the Budget package:

“For the first time in the financial and policy planning of our nation, we are formally beginning to think of an ageing population as an opportunity rather than a burden, and recognising the contributions that are and can be made by older Australians to everyone’s social and economic wellbeing.”

I couldn’t agree more.