MA Blog Jan 2016

What will Australia’s population will look like in 2050? The reality is that it would have an overwhelming number of ageing retirees unless, immigration levels are maintained if not increased in order to slow the country’s rate of ageing, according to a recent report on the SBS.

The simple reason is that migration introduces ready-made young labour to the economy and deals with the problem of an ageing local population, prominent Australian demographer, Professor Peter McDonald told the SBS. A report by theMigration Council of Australia last year said that Australia needs to attract more skilled migrants in the order of 250,000 a year to boost the economy and sustain future growth.

With the current migration policies focussing on skilled labour, the Australian migration program systematically and continuously introduces working aged adults with the relevant skills to help prop up the economy and deal with the country’s ageing population.

The real danger is that as Australia’s population gets older and more people leave the workforce, Australia’s Real GDP per capita could fall if there is no improvement in labour productivity.

“You have to run harder with the productivity component, or make us a little bit younger. You do that through migration. Or, you can keep people working of course too.” Prof McDonald said.

He explained that the shift in Australia’s population distribution is primarily due to rates.

“The Australian birth rate was high during the Baby Boomer years,” Prof McDonald said.

“From the 1970s onwards, the birth rate went to a lower level.”

Prof McDonald told the SBS that the Baby Boomers – who made a large under-20s bulge during the 1970s – had now started to enter retirement. The Baby Boomers will continue retiring over the next decade.

On top of that, we are living longer, Prof McDonald said.

“We’re much more likely to be living into the 80s and 90s than we have in the past.”

He said the older generation today was healthier than older generations of times past, in part thanks to less heavy drinking and smoking throughout people’s lifetimes.

Increased access to medical care and drugs, which has allowed society to control disease more effectively, has been an important development.