In general, Australians are living longer and healthier lives than in years past and are more active in their older years. The Australian government’s Intergenerational report suggested that over the next 40 years, Australia will need to “embrace the potential of this talented older population group, particularly by valuing their increased and ongoing engagement in the workplace and community”.
While total labour force participation is projected to decline as the population ages, the report noted that, based on recent trends, some age groups are expected to experience rising labour force participation rates.
Participation rates of older age groups (aged 55+) have risen in recent years, a trend that the government expects to continue as life expectancy increases and the availability of less physically demanding work rises.
Participation rates for men and women are projected to increase significantly for those aged 60–69 years. This is partly associated with the gradual increase in the Age Pension eligibility age from 65 to 70 years between 2017 and 2035.
University of New South Wales Professor John Piggott has noted that Treasury estimates suggest that a 5% increase in the labour force participation rate in the 60-64 age group would increase GDP by 3%.
The 2018-19 federal budget highlighted that Australians are now expected to live 10 years longer than they were 50 years ago, with our life expectancy now the fifth highest in the OECD. In response to this and to encourage workforce participation by older Australians, the government is allowing age pensioners to earn an extra $50 per fortnight without reducing their pension.
The government is also offering subsidies for hiring workers aged over 50 and providing a skills and training incentive of up to $2,000 to fund upskilling opportunities for mature aged workers.
Given the ageing population and the potential benefits of increased workforce participation both for older Australians and for the economy, it is important that this trend is supported by businesses, as well as the government.
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