Warming to hit pockets: report

The proportion of Australians aged 65 and over is projected to almost double over the next 40 years. Photo / Bay of Plenty Times

Australians were given a stark choice yesterday: bite the bullet now, or face a future of declining prosperity and rising hardship in a land damaged beyond repair by climate change.

An assessment of the challenges of the next 40 years, released by Treasurer Wayne Swan, sketched the need for a massive new agenda against a background of a greying population, soaring health and welfare costs, sliding productivity and the need for vast investment in housing, schools, hospitals, transport and energy to cope with a population expected to reach almost 36 million by 2050.

The nation's third intergenerational report also warned of environmental chaos from looming climate change, afflicting the continent with changing weather patterns and severe water shortages in cities, towns and rural communities, and hammering agriculture, tourism, infrastructure, health and biodiversity.

"As one of the hottest and driest continents on earth, we will be one of the hardest and fastest hit [by climate change]," the report said.

"The Great Barrier Reef and [World Heritage-listed] Kakadu National Park will be threatened, nearly all irrigated agriculture in the Murray-Darling Basin could cease, and the cost of urban water supply could increase dramatically."

The report warned that without action the economy would take a serious hit, with a cost equivalent to every Australian being about A$17,000 ($20,760) worse off - "and this is a conservative estimate".

Swan said Australia needed to act now to pass on a better and stronger nation to its children.

"[The report] is a stark reminder that we can't sit on our hands or play political games with this country's future.

"Passing all of these tests will be extremely difficult, but not beyond us.

"To those daunted by the challenges I've laid out today, I say surely a nation that defied global economic gravity in recent times is capable of countering the effects of an ageing population and the threat of climate change.

"In every area - in fiscal responsibility, in participation and productivity, in cities and infrastructure, in climate change - the lesson is that if we act today then we can reap the benefits in the future."

Much of Swan's nationally televised launch at the National Press Club in Canberra focused on policies already launched or planned by the Government - including the greenhouse emissions trading scheme at present blocked in the Senate - but he did announce a new A$43.3 million package to encourage older workers to remain in the workforce beyond retirement age, a key aim to boost national productivity and reduce the cost of a greying population.

As with other developed countries, ageing is becoming a major concern for Australia: the number of people aged between 65-84 is predicted to double over the next 40 years, rising to 23 per cent of the total population, reducing the workforce participation rate, increasing the costs of health and associated care, and placing a heavier burden on younger generations.

Ageing and health pressures are expected to push total government spending to more than 27 per cent of gross domestic product by 2050, with spending forecast to by then exceed revenue by 2.75 per cent of GDP.

At present, five working-age Australians support each person over 65. By 2050 that figure will fall to 2.7.

The nation's productivity growth has already slowed from an annual average 2.1 per cent in the 1990s, to about 1.4 per cent.

The Government estimates that if growth can be returned to 2 per cent a year the economy will expand by A$570 billion by 2050, boosting living standards by lifting average living standards by about A$16,000 a year.

Keeping older people in the workforce would help significantly, the report said.

Swan's "productive ageing" package includes moves to retrain older workers as supervisors or apprentice trainers, help find new jobs for people with debilitating health conditions or injuries and to move others to less physically demanding tasks, and to provide specialised career advice.

He also announced a new Consultative Forum on Mature Age Participation to help form measures to keep older Australians in the workforce. It will meet for the first time this month.

AGE-OLD PROBLEM

* The proportion of Australians aged 65 and over is projected to almost double over the next 40 years.
* Today there are five working-age people for every person aged 65 and over.
* By 2050, the ratio will fall to only 2.7 people.
* Supporting a larger population of older people is expected to result in government spending exceeding revenue by 2.75 per cent of gross domestic product in 2049/50.
- AAP