Thursday, February 26, 2004
Falling fertility starts to bite
The consequence of the present generation's decision not to have babies is starting to bite in Australia.
Australia's baby boomers have been told many will have to work well past the present retirement age of 65.
In a stark assessment of the future facing the nation's rapidly aging population - a consequence of the falling fertility rate - Treasurer Peter Costello yesterday announced new policies to keep baby boomers in the workforce.
The aim will be to enable people to keep working into their 70s, and to encourage new generations to save for their retirements.
Without major changes, tens of thousands of Australians will eke out their final years on a pension equivalent to one-quarter of the average wage - now about A$19,600 ($22,130) a year for a couple.
Recent studies suggest this is A$10,000 below the minimum needed to stay above the poverty line.
Costello said that to maintain even this while keeping pace with an over-65 population that will almost double over the next 40 years, Australia was faced with four choices.
It could increase income tax by up to 40 per cent, slash Government spending by the equivalent of total present expenditure on health, run huge Budget deficits or boost the size of the economy.
The consequence of the present generation's decision not to have babies is starting to bite in Australia.
Australia's baby boomers have been told many will have to work well past the present retirement age of 65.
In a stark assessment of the future facing the nation's rapidly aging population - a consequence of the falling fertility rate - Treasurer Peter Costello yesterday announced new policies to keep baby boomers in the workforce.
The aim will be to enable people to keep working into their 70s, and to encourage new generations to save for their retirements.
Without major changes, tens of thousands of Australians will eke out their final years on a pension equivalent to one-quarter of the average wage - now about A$19,600 ($22,130) a year for a couple.
Recent studies suggest this is A$10,000 below the minimum needed to stay above the poverty line.
Costello said that to maintain even this while keeping pace with an over-65 population that will almost double over the next 40 years, Australia was faced with four choices.
It could increase income tax by up to 40 per cent, slash Government spending by the equivalent of total present expenditure on health, run huge Budget deficits or boost the size of the economy.
