1. The Demography of Australian Ageing over the Next Decade: Certainties, Surprises and Implications for Government by Graeme Hugo ARC Australian Professorial Fellow, Professor of Geography and Director of the Australian Population and Migration Research Centre, The University of Adelaide Presentation to COTA National Policy Forum, National Press Club, Canberra 22 July 2014

2. Outline of Presentation Introduction The Growth of Australia’s Older Population Drivers of Ageing in Australia Changing Composition Changing Distribution Implications for Government Policy Conclusion

3. Key Issues The Certainties of the Demography of Ageing There are no policy “silver bullets” Australia is well placed demographically to accommodate the change However initiation of a range of initiatives needs to be done now An opportunity as well as a challenge

4. Four Certainties of the Demography of Ageing in Australia Population aged 65+ will increase by 85% between 2011 and 2031 Percentage aged 65+ will increase from 13.8 in 2011 to 18.7 in 2031 The characteristics of the older population will change Their spatial distribution will change

5. Australia: Population Change by Age, 2006-11 Source:ABS 2011 Census 20062011% Change Total19,855,29121,507,7168.3 65-741,373,4351,627,40718.5 75+1,270,9351,384,8809.0 65+2,644,3703,012,28713.9 15-6413,273,71014,351,4058.1

6. Australia: Population Change by Age, 2011 and Projected 2031 Source:ABS Estimated Resident Population and 2031 Projections Series B 20112031% Change Total22,340,02430,501,19236.5 65-741,681,9312,878,51171.1 75+1,405,9802,826,768101.1 65+3,087,9115,705,27984.8 15-6415,018,50019,255,27328.2

7. Australia: Comparison of Projected Growth of Population, 2031 Source:ABS 2013 Projections Series ASeries BSeries C Difference Series A and C in 2031 (m) 2011 (m)2031 (m) Total Population22.3431.8730.529.32.57 65+3.095.835.715.690.14 Percent 65+13.818.318.719.41.1

8. Australia: Age Sex Distribution, 2011 and Projected 2031 Source: ABS 2011 Census; ABS Projections, Series B, 2013

9. WHY IS AUSTRALIA’S POPULATION AGEING? Fertility – the rate at which women in that area were having children 65-90 years ago. Mortality – the rate at which older people are lost to death. Migration – the extent to which older people move into or out of the area. The ‘ageing in place’ of residents in the area into the 65+ age groups.

10. Australia: Total Fertility Rate, 1901-2012 Source:CBCS, Demography and ABS, Births Australia, various issues

11. Australia: Age Structure 1961 to 2011 Showing Baby Boomer Cohort Source:ABS Censuses

12. Australia: Expectation of Life at Birth, 1870-2011 Source: Hugo 1986 and ABS Deaths Bulletins Expectation of Life at Birth Males Females 1947 66.1 70.6 1981 71.4 78.4 2011 79.7 84.2

13. Australia: Expectation of Life at Age 50, 1901-1910, 1970-1972 and 2011 Source: ABS

14. Key Questions on Longevity Are we increasing the maximum age people can reach or are just a greater proportion getting closer to the maximum age which remains fixed? Proportion of years spent with and without disability, concept of disability free years

15. Are Baby Boomers Healthier than Previous Generations? Baby boomers are in many ways a privileged generation being the first generation to grow up in an era of increasing affluence and prosperity. They have unprecedentedly high levels of education compared with earlier generations. They grew up in an era of expanding job and educational opportunities. They were the first generation to grow up having access to immunisation and antibiotics. They have substantially lower levels of smoking than previous generations.

16. Are Baby Boomers Less Healthy than Previous Generations? Firstly, the very medical breakthroughs which have ‘rescued’ baby boomers from dying of a heart attack or stroke like the previous generation may in fact leave them with a chronic illness or disability. Secondly, baby boomers, more than previous generations, have adopted sedentary life styles and have a higher incidence of obesity than any previous generation.

17. Uncertainty About This Question in Australia Global Burden of Disease Study 1990- 2010 found in high income countries decrease in mortality offset by increased years of living with disability In Australia suggestion that this has not been the case but there is a lack of data to be definitive

18. Proportion of the Population with Disabilities, 1981-2012 Source:ABS, 1999 and 2013b Age Group198120032012 45-5416.721.618.1 55-6427.133.829.4 65-7434.644.442.0 75+53.168.067.6 All People13.220.018.5

19. Australia: Disaggregation of Life Expectancy Into ‘Disability Free’ and ‘With Disability’ Years, 1998 and 2012 (Years) Source:AIHW, 2014, 3 MaleFemale 1998201219982012 Life Expectancy at Birth75.979.981.584.3 Disability Free Expectancy58.062.462.164.5 With Disability Expectancy17.917.519.419.8

20. Unrecognised burden of mental illness especially dementia (Global Burden of Disease Study) Access Economics – Number with dementia 2011:266,574 2030:553,285 2050:942,624 Recent evidence that these numbers can be substantially reduced by lifestyle and diet adjustments

21. Australia: A Country of Immigration 26.1 percent born overseas in 2011 18.8 percent Australia-born with an overseas-born parent(s) in 2011 908,049 persons temporarily present at 30 June 2011 Without postwar migration the Australian population would be less than 13 million 19.2 percent of Australian households use a language other than English at home

22. Australia: Age-Sex Distribution of Recent Permanent Settler Arrivals, 2012-13 Source: DIAC unpublished data

23. Australia: Settler Arrivals by Region of Last Residence, 1947 to 1996 and Permanent Additions by Region of Birth, 1997 to 2013 Source: DIBP data

24. Australia: Australia-born and Overseas-born Age-Sex Distribution, 2011 Source: ABS 2011 Census

25. Australia : Persons Aged 65+ years by Birthplace, 2011 Source: ABS 2011 Census

26. Australia: Italian Ancestry and Italian-Born by Age and Sex, 2011 Source: ABS, 2011 Census

27. Australia: Indian Ancestry and India-Born by Age and Sex, 2011 Source:ABS, 2011 Census

28. Australia: Age Pension Paid Overseas by Country of Residence, June 2011 Source:Department of Families, Housing, Community Services and Indigenous Affairs, 2012

29. Role of Immigration in Ageing Slight younging effect Greatest positive impact is its impact on productivity Increasing diversity of Australia’s older population

30. The Characteristics of Older People Age Vs Cohort effects The Baby Boomers are quite different to previous generations of older Australians when they were on the verge of retirement Must not assume it will be “more of the same” in working, housing, spending, use of leisure, needs and demand for services etc

31. Australia: Baby Boomers and Pre-war Generation As They Enter Old Age, Social Indicators Source:ABS National Health Surveys 1989-90 and 2008-09; ABS Census 1981 and 2006

32. Some Key Considerations The extent to which baby boomers will be able to call upon a partner or a child to assist in their day to day care will be considerably less than the previous generation of older Australians. Yet policy is to increase the proportion of care being delivered at home rather than in a residential care context. The proportion of baby boomers owning their home outright will be less than is currently the case. Yet home ownership is one of the three pillars of the Australian aged care system. Increasing cultural diversity presents many challenges in aged care provision because until relatively recently the population aged 85+ was overwhelmingly Anglo Celtic in origin.

33. Australia: Persons 15 Years and Over, Visited a GP 12 or More Times in the Previous 12 Months Source:ABS, 2012

34. Health Status at Mid-life: Baby Boomers Compared with Pre-war Generation Source:ABS; National Health Surveys, 1989-90, 2007-08 Health Indicators Baby Boomers at Mid-life % Pre-war Generation at Mid-life % Obesity2612 Diabetes93 Asthma105 Hearing loss178 Arthritis3326 Migraine64 Back problems96 Multiple conditions (≥3)40.5 High cholesterol148 Alcohol risk1511 Currently smoking1824 Emphysema/bronchitis35 No private health cover3742

35. Differences Within the Baby Boomer Generation Dangers of stereotyping Need to look at variations within First generation to develop highly segmented markets

36. Australia: Average Household Net Worth by Age of the Household Reference Person, 1994-2012 Source:ABS, 2002, 2007 and 2013c

37. Housing Tenure Tenure45-5455-6465-7475+ Percent Owned outright27.551.372.176.2 Owned with a mortgage49.430.912.26.6 Being purchased under a rent/buy scheme0.20.1 Rented21.516.213.412.6 Being occupied rent-free0.8 1.0 Being occupied under a life tenure scheme0.10.20.82.5 Other tenure type0.4 0.51.1 Total100.0 N2976481253260516440471391101 Australia: Tenure by Age, 2011 Source:ABS 2011 Census

38. Comparison of Owners and Renters: Demography Source:SAMSS, 2007-13

39. Comparison of Owners and Renters: Chronic Conditions Source:SAMSS, 2007-13 Owners (%)Renters (%) Diabetes7.813.0 Asthma1016.8 COPD4.48.4 Arthritis25.931.6 Osteoporosis3.85.6 Mental Health15.429.6 At Least One Chronic Condition47.461.1

40. A DIFFERENT SPATIAL DISTRIBUTION Where older people live is important for a number of reasons: Older people have lower levels of personal mobility which means they are restricted in their ability to travel long distances to obtain services and interact. Housing is often the major element in older people’s assets. Their local area is often where their main social contacts are located. Their home can hold many important memories crucial to their wellbeing.

41. Australia: Persons Who Moved in the Last Five Years by Age, 2001-06 and 2006-11 Source:ABS 2006 and 2011 Censuses

42. Simplified Model of Response of Older People Entering Retirement

43. A Typology of Migration of Older Australians Source:Hugo, 1988, 17 AgeTypeSelectivity Reason for Moving ‘Young Old’ 60s and early 70s Mainly VoluntaryHigher Income Lower Income -recreational, retirement to resort locations – environmental factor -trade down to age-appropriate housing -closer to children -forced housing adjustment – renters and mortgage holders ‘Old Old’ 70s and over Showing Element of Compulsion Little Selectivity -onset of widowhood or disability forces move to be closer to children -inability to live independently forces need to live with children or residential care

44. To What Extent Will Baby Boomers Move As They Near Retirement? In the United States there is a clear secondary peaking in the age migration profile around retirement ages No evidence in 2011 Australian Census internal migration data Delaying due to increased workforce participation?

45. Australia: Changes in Participation Rates of the Older Population in the Workforce, 1970-2014 Source:ABS Labour Force Surveys Age Group Percent Participation May 1970June 1999February 2010January 2014 MalesFemalesMalesFemalesMalesFemalesMalesFemales 55-5991.528.772.944.179.464.479.063.5 60-6479.214.946.917.661.741.861.842.5 65+23.23.69.73.214.86.416.07.5

46. Mixed Evidence of Increased Retirement Migration by Baby Boomers Beer and Faulkner (2009, 133) found 41.5% of persons aged 55-64 had moved in last 10 years Olsberg and Winters (2005) found two thirds want to remain in their own homes

47. Australia: Rest of State Age-Sex Specific Net Migration Profile, 2006-2011 Source:ABS 2006 and 2011 Censuses

48. Growth of Population 2006-11 *Clear evidence of sea change type migration

49. The Potential Role of Second Homes (Study of 9 Councils) Located in resort areas, mostly coastal 45% owned by baby boomers 30.7% have definite intentions to move permanently to them – others will increase the amount of time spent there

50. Age structure of persons intending to move to non resident owned property

51. Changing Distribution within Cities Preference shown to “age in place” However often attachment is to a local community rather than a particular house Concept of “age appropriate housing” Unknown whether baby boomers will move more but even if they move to the same extent there will be a large impact because of their greater numbers

52. Types of Retirement Migration Among Baby Boomers Migration to environmentally amenable resort communities in coastal, riverine and other non-metropolitan areas. Voluntary trading down to more age- appropriate housing within metropolitan areas. Involuntary trading down among renters and mortgage holders who are unable to keep up payments when they cease full-time work.

53. Adelaide Statistical Division: Distribution of Population Aged 65 Years and Over Between Metropolitan Sectors, 1971-2011 Source:ABS 1971 to 2011

54. Adelaide Statistical Division: Growth of the Population Aged 65+ by SLA, 2006-11 Source:ABS 2006 and 2011 Census

55. Metropolitan Adelaide Sectors and Aged Care Beds, 2000 and 2013

56. Metropolitan Adelaide: Number Beds/1000 persons Aged 70+, 2011 and Projected 2021 and 2026 Source:ABS 2011 Census and ABS for the purpose of the Commonwealth, through the Dept. of Health and Ageing, and other governments, 2007

57. Potential Role of Baby Boomers in Achieving Important National Goals Regional development – retirement migration as a key location leader for development in selected regional areas Increasing population density of suburbs, TODS Increasing availability of affordable family housing Potential role for policy

58. Conclusion Much of the material presented about Australia’s future aged population is fact rather than prediction, projection or estimate However some uncertainties… –How healthy will baby boomers be in old age? The signs are not good here but real efforts to reduce obesity among baby boomers could have massive dividends in improving their lives in old age but also substantially reducing demands on the health and aged care systems. –How many baby boomers will move as they approach or enter retirement? This will be influenced by whether or not they continue working into old age, the availability of alternative housing options, patterns of partnering among baby boomers, etc. –What will be the preferences of baby boomers for housing – both while they are fully independent and when they need care?

59. Projections of Aged Care Workforce Demand Source:Productivity Commission 2011 20102020203020402050 Residential Care Direct care workers (FTE workers)85,000107,000157,000254,000353,000 Direct care workers (total workers)144,000182,000266,000431,000598,000 Total residential care workforce (direct and support workers) 189,000239,000349,000565,000785,000 Community Care Direct care workers (FTE workers)11,00041,00057,00082,000102,000 Direct care workers (total workers)19,00066,00092,000132,000164,000 Total community care workforce (direct and support workers) 22,00078,000109,000156,000194,000 Total Workforce Requirement a 212,000317,000459,000721,000979,000 a Total workforce requirement may not reflect sum of components due to rounding.

60. Policy Implications Policy must be multifaceted –Transformation of health and aged care systems –Increasing retirement age and associated retraining, transitioning etc –Increasing workforce participation –Population issues – immigration, fertility –Focusing on potential dividends not just challenges Intergenerational Report. The Three Ps… –Population –Participation –Productivity A Fourth P – Planning, Preparation