Bobby Batten is part of a workforce set to face growing issues due to the ageing population. Source: Herald Sun
THE retirement age may have to be raised to 70 to slow the rate of baby boomers leaving the workforce before they put too much strain on the economy, a Federal Government agency warns.
The National Sustainability Council's first report predicts a near-doubling in the number of retirees over the next 20 years, straining taxpayer spending on pensions, health and aged care.
Council chairman John Thwaites suggested raising the retirement age as a way to make baby boomers work longer.
Otherwise, Australia might not have enough workers to support all the retirees, students and people on welfare.
"The decisions and actions we take over the next 10 years will determine whether or not the next generation of Australians will become the first in recent history to be worse off than their parents and grandparents," he said.
Professor Thwaites called for an "intergenerational discussion" about the baby boomers sharing their wealth with their children and grandkids.
"The Gen X and Gen Ys will be largely the ones working and raising the money for the baby boomers, who are the ones holding the wealth," he said.
"If we have a lot of conflict, you'll end up seeing the Gen Xs and Gen Ys saying, `We won't pay taxes to help your health system and aged care'.
"People are sitting on valuable houses and their kids' generation can't afford it. How are they going to resolve that?"
The Sustainability Council report predicts fewer Australians will be working and paying taxes to support a greying population.
The number of Australians over retirement age has been growing three times faster than the general population over the past 30 years - and is predicted to nearly double to 5.7 million in 20 years' time.
"A big challenge will be how to pay for all their health costs with a smaller proportion of the population in the workforce," Professor Thwaites said.
"We will need to increase the participation of older workers in the workforce and one way to do that is raising the retirement age.
"Or you could support more flexible working conditions and encouragement or incentives for older workers."
The proportion of over-65s in the workforce has nearly doubled in a decade, to one in four men and one in eight women.
The report says that increasing the pension age to 70 would boost workforce participation rates by 1.4 per cent and increase economic growth by $25bn a year.
It also warns of a growing underclass.
One in three children living in Australia's poorest suburbs are "developmentally vulnerable" - double the rate for kids in high-income homes.
"The gap between rich and poor has worsened over the past two decades," Professor Thwaites said.
"There are a lot of kids growing up in families where they don't have a working parent in the household, and you need educational opportunities for those kids.
"We can't afford to have a cohort of people not finishing school and not getting qualified."
Professor Thwaites said Australia might need to rely even more on temporary foreign workers to plug the shortage of well-educated and qualified Australians.
Victorian construction worker Bobby Batten, 32, said there should be a universal effort to support an ageing nation, and people should not be forced to take retirement later.
"It may come down to working longer, but everyone might have to chip in," he said.
" I think the baby boomers should do a little bit more now. But raising the retirement age is a bit pushy - they need to find another way."
