PM Urges Australia's Aging Population to Become More Productive

by Trilok Kapur on  January 20, 2010 at 12:45 PM Lifestyle News   - G J E 4
Prime Minister Kevin Rudd has warned, Australians must become more productive or risk losing their famously relaxed lifestyle as the population ages and the workforce shrinks.
 PM Urges Australia's Aging Population to Become More Productive
PM Urges Australia's Aging Population to Become More Productive

While Australians were urged in the past to "populate or perish", Rudd said the country now needed to boost productivity as the population becomes increasingly elderly and the tax revenue from workers falls.

"It is productivity growth that must play the central role in building Australia's future economic growth," Rudd said in a speech delivered in Melbourne late Monday.

It is estimated that Australia's population will grow from the current 22 million to 36 million by 2050 thanks to surging birth rates and rising immigration.

At the same time, increasing life expectancy means the proportion of those citizens aged 65 or over will jump to almost one in four by that time.

These demographics mean that public finances will be burdened with the increased costs of looking after the elderly at the same time as a smaller proportion of Australians will be contributing to tax revenues, Rudd said.

"With a smaller proportion of Australians in the workforce, the size of the national economic pie will grow more slowly, and as a result, average family incomes will grow at a slower rate than we've become accustomed to," he said.

"Unless we make big changes, we will either generate large, unsustainable budget deficits into the second quarter of the century, or else we'll need to reduce government services -- including health services -- as the needs of an ageing population become greater."

Rudd said productivity growth had fallen to 1.4 percent in the first decade of this century.

"If we let this trend of lower productivity growth continue, Australia will struggle to meet the major challenges facing our economy in the decades ahead," he said.

Source: AFP

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