Our ageing population isn't a disaster. We have the tools to make it a triumph
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Version 0 of 1. Two profound shifts will take place over the next 15 years: the retirement of the baby boomer generation – usually described in Australia now as the ageing of the population – and the need to transition one of the world’s most fossil fuel intensive economies to a clean energy future in the face of climate change. The ageing of the population is generally regarded by economists and commentators as an unmitigated disaster. It’s going to bankrupt the budget, it’s going to strangle our economy and it’s going to usher in a gerontocracy whereby older Australians use their weight of numbers at the ballot box to pursue their own self-interest at the expense of everyone, particularly their grandchildren. Related: Sod 70! I hate being one of 'the elderly' but not for the reasons you may think I’m not a fan of the doomsday approach to this question. I’m a much bigger fan of the World Health Organisation’s perspective, which describes the addition of 25 years to life expectancy here and in so many other countries as “one of humanity’s greatest triumphs”. It will bring a raft of challenges. But from my perspective the greatest challenge is to ensure, as far as possible, that those additional years are good years, in which older Australians are secure, healthy, active and, perhaps most importantly of all, they continue to feel valued by the community they did so much to build in the first place. The truth is we need to do much more on all of those matters. Our age pension is the most modest in the OECD, yet is under constant attack from the Tories and their barrackers in the media. Our superannuation accounts are inadequate for too many older Australians. Half of the women in the baby boomer generation have superannuation accounts of less than $30,000. Half of the women in their early 60s have superannuation accounts of less than $16,000 to last them (on average, we expect) an additional 25 years of life. Rates of outright home ownership among baby boomers are in very steep decline Rates of outright home ownership among baby boomers are in very steep decline, removing one of the most important pillars of retirement income security – a very important hedge against our very modest age pension. At a less tangible but no less important level, our attitudes generally to older age in this country, and so many others across the world, are simply dreadful. Ironically perhaps, the generation that did more than any other to create modern society’s cult of youth is now feeling its pointy end. I can tell you from my research that the baby boomers don’t like it one bit! This transition to a new normal in Australia, where about 20% of the population is aged over 65, really does require some very serious policy attention – to retirement incomes, to housing, to healthcare and many other areas. It requires a much more positive attitude to a dynamic that Australians 100 years ago could scarcely have imagined. Only Labor has the policy depth and the values system that will allow us to sustain the social democratic project in the face of such a significant population shift. Our population shift will be easier to manage here in Australia than any other country I can think of – in large part because of so many far-sighted policy reforms that were put in place 25 years ago by Hawke and Keating, way ahead of the curve. But in large part also because of our exceptional demographic and economic projections over coming decades. Almost all of the OECD nations outside the Anglosphere are seeing the retirement of their post-war baby boomers coincide with very low fertility rates and/or very low immigration, to produce a population that’s not only ageing very fast but also shrinking. Germany is in the process of clearing vast swathes of vacant housing to create open space, to mask the fact their population is starting to shrink. Japan’s working age cohort has been shrinking for 20 years. In 2050, we expect that Japan will be as much as one third smaller than it is today, returning almost to the same population Japan had in 1950. In the next 25 years, 500 of Japan’s 1,800 local government areas will simply disappear. And in our other two largest export markets – South Korea and China – we also see a situation where their working age cohort is about to start to decline as the retirement of their baby boomers coincides with two of the world’s lowest fertility rates and largely non-existent immigration. Australia, by contrast, will likely grow to a population of about 40 million by the 2050s which will see a level of ongoing workforce and economic growth that is exceptional across the OECD. Such growth presents something of a mixed blessing. A growing population is going to make the task of reducing our carbon pollution levels harder Obviously, at its most basic, a growing population is going to make the task of reducing our carbon pollution levels harder. Take Spain for example. In 2000, Spain was about twice as big as Australia – 40 million people compared to our 20 million. By 2050, on some projections we may well be around the same size as Spain at about 40 million people. So our per capita task in carbon pollution reduction between 2000 and 2050 will be twice that of Spain. On the other hand, our rising incomes, our abundant capital, will better position us to finance the extraordinary transformation we’re going to have to undertake in our energy and transport systems, and in our land sector, in those coming decades. A meaningful response to climate change essentially has two commitments at its core. The first is to ensure that global warming reaches no more than two degrees Celsius beyond pre-industrial levels. The second is that all nations, including Australia, do their fair share to achieve that particular goal. Now, Australia must face up to that responsibility, being frank about the fact that we are the heaviest polluters per head of population in the OECD. That, of course, is the challenge leading into the Paris Conference in December. But whichever way you cut it, this will require a huge transformation in our energy system; the creation of much greater capacity in renewable energy; an extraordinary transformation in transport – the development of electric vehicles – and vehicle emissions standards in the meantime and substantial investment in public transport. We’ll see huge transformation in our land sector, starting to sequester carbon dioxide rather than continue to release it in the net volumes that we have seen since white people arrived in this country. While this transition will bring enormous opportunities in employment, innovation and our quality of life, it will fall harder on those regions that have traditionally based their prosperity on fossil fuels. I’m particularly talking about areas like the Latrobe Valley in Victoria and the Hunter Valley and the Illawarra here in NSW. Reflecting on the experience of the 1980s and how the party and union movement managed that very significant transition, so heavily focused on blue collar employment, I am convinced that it’s only the Labor party, only social democrats, who will be able to ensure the impact is spread as broadly as possible, those impacts are managed as fairly as possible, and that those regions are able to readily access the opportunities that undoubtedly will be there in a clean energy future. Only Labor is going to be able to do that. Labor’s emissions trading scheme will operate to share the responsibility of the transition as broadly as possible, rather than focussing on particular regions, or particular industries. The market based nature of the ETS is going to deliver incentives that will deliver extraordinary innovation and employment opportunities for Australia. At the end of the day, a meaningful response to climate change is not a matter of choice. It’s a matter of when we do it and it’s a matter of how we manage it. And we know that the longer we delay real action, the steeper the climb will end up being. There’s only one part of Australia’s political system that I’m confident is going to be able to drive this significant transformation, this disruption to things we’ve become so used to, in a manner that is consistent with our national values of fairness and opportunity – and that is the labour movement. The end of the cold war made it fashionable to think that we had passed into a profoundly new phase of history, where the struggles of the 20th century had either been settled or had become irrelevant. Academics like Francis Fukuyama talked about the end of history, Tories across the world toasted the end of social democracy, and many of us on the progressive side of politics fretted and wondered “what next for the left?” They were all wrong. While we still confront discrimination in our marriage laws, the social democratic project is not finished. While there is still the level of rampant inequality for Aboriginal and Torres Strait Islander people, there is still so much work to do. While there is such a vast gender gap and growing income inequality between classes, we can’t say that the work of that project is yet done. And when we confront the scale of transition and disruption that will be experienced as we move to a clean energy future, the social democratic project remains just as important today as it was at any time in the 20th century. And we know in our hearts and in our minds, that an Australia that remains true to the values that we built up in the 20th century – fairness and opportunity for all – will not be sustained by the reactionaries that have taken over the Liberal party or by the Greens party pontificating from the cheap seats. The fortunes of Australia, as always, are inextricably tied to the success of the social democratic project, and to the values and the cause of Labor. |